The Biden administration is expected to announce the third round of subsidies under the US Chips Act to help chip companies build new chip manufacturing factories in the United States. These high-end semiconductors will be used in smartphones, artificial intelligence (AI), and weapons. $Intel(INTC)$ and $Taiwan Semiconductor Manufacturing(TSM)$ may become the beneficiaries of these subsidies.
In addition, chip companies such as $Micron Technology(MU)$ , $Texas Instruments(TXN)$, and $GLOBALFOUNDRIES Inc.(GFS)$ are also serious contenders.
Moreover, executives in the chip industry predict that Biden will announce some subsidy news before his State of the Union speech on March 7th.
US to announce billions in subsidies for advanced chips - Electronics Manufacturing News
$MAIN INTERNATIONAL ETF(INTL)$ currently has ongoing chip factory projects in Arizona, Ohio, New Mexico, and Oregon, with a cost of more than $43.5 billion.At the same time, $Taiwan Semiconductor Manufacturing(TSM)$ has two plants under construction near Phoenix with a total investment of $40 billion. Additionally, $Samsung Electronics Co., Ltd.(SSNLF)$has a $17.3 billion project in Texas.
The US Department of Commerce declined to discuss any potential applicants, and refused to comment on the timing of subsidies. However, a spokesperson for the department quoted officials as saying that the criteria for subsidies under the Chips Act will solely depend on the importance of the project to boosting the US economy and national security.
In December 2023, US Secretary of Commerce Gina Raimondo said that around 12 semiconductor manufacturing projects would be announced over the next year, including multi-billion dollar subsidies that could completely reshape US chip production.
In December last year, the US Department of Commerce announced the first round of subsidies for semiconductor manufacturing under the framework of the Chips and Science Act, with U.S. defense contractor BAE Systems receiving the first federal grant of about $35 million.
The grants will be used to expand production of chips used in the F-15 and F-35 fighter jets, as well as satellites and other defense systems. In August 2022, US President Joe Biden signed the $39 billion Chip Act, which will provide subsidies to the US chip industry.
US President Joe Biden speaks at a meeting of the National Infrastructure Advisory Council, in the Indian Treaty Room of the White House in Washington, DC, on December 13, 2023.
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