U.S. Set to Boost Chip Industry with Major Grants by March End

In a decisive move to bolster domestic semiconductor production, the U.S. is poised to unveil significant grants by the end of March, channeling billions to key industry players like Intel Corp. ($INTC), Taiwan Semiconductor Manufacturing Co. ($TSM), and Samsung Electronics Co. This initiative, part of the 2022 Chips and Science Act, which earmarked $39 billion in direct grants, marks a critical push to rejuvenate U.S. manufacturing prowess in the chip sector.

Intel Corp., once a chipmaking titan, views these grants as crucial for hastening its expansion plans, notably its ambitious Ohio facility, projected to be the world's largest. Both TSMC and Samsung are also in line for funding, aiding in their U.S. factory establishment efforts. Despite the slow initial grant rollout post the legislation's enactment, these forthcoming disbursements are seen as vital for rebalancing the global chip production landscape, perceived by Washington as overly concentrated in East Asia.

With the 2024 presidential race on the horizon, this initiative gains added significance, promising thousands of factory jobs and invigorating new manufacturing hubs, fortifying President Joe Biden's economic agenda. Commerce Secretary Gina Raimondo has indicated plans for about a dozen awards this year, including substantial grants to support advanced chipmaking facilities, potentially covering up to 15% of project costs.

For companies like Intel, grappling with competition and seeking resurgence under CEO Pat Gelsinger, these funds are a lifeline. They mitigate the hefty financial burden of constructing facilities, which can reach $30 billion and risk obsolescence within a decade. Semiconductor giants have committed over $230 billion in U.S. investments, contingent on governmental backing.

In this strategic chess game, the U.S. is positioning itself not just as a player but as a pivotal force reshaping the global semiconductor landscape, aligning economic, technological, and geopolitical imperatives.