Although the Inflation Reduction Act and the CHIPS and Science Act aims to grow the in-house chip industry of the US, the government is not providing capex and subsidies on time.
The government of the USA is now facing sudden challenges of delays in setting-up of the new semiconductor projects, which were approved under the Inflation Reduction Act and the CHIPS and Science Act. The policies were announced to boost the domestic green energy and semiconductor industry, thereby making it self-reliant to reduce dependence on other countries.
Reports surfaced that the projects approved under the act with an investment of approximately 227.9 billion have faced delays from two months to several years. Now, the question is why? According to the government, around 114 ventures were approved with a total investment of $227.9 billion. The firms have mentioned that poor market conditions, unreliability in domestic policies, and slow demands have forced them to change their project plans.
According to TrendForce, back on August 13, world’s largest semiconductor foundry TSMC, announced to invest $7.5 billion to set-up a new foundry unit in Arizona. With an investment of $65 billion, the company in the beginning had announced to construct three fabs in Arizona, but four years have passed, TSMC is yet to manufacture a single chip. Competition with Intel in regards to labor price, and cultural differences have provided barriers to TSMC in producing chips.
Intel, on the other hand, has planned to invest $100 billion in the coming five years to build new fabs and expand existing units in Arizona, Oregon, New Mexico, and Ohio. The investment will be creating 20,000 on-site construction jobs, and 10,000 manufacturing jobs. USA’s other global media, the Wall Street Journal has penned that Intel has deliberately delayed the $20 billion project in Ohio owing to massive delays in government subsidies and market downturns. Ohio is expected to have two cutting-edge Intel fabs by 2025, but the completion of both the fabs has been delayed until 2026-27.
The world’s largest semiconductor company, Samsung announced to set-up a state-of-the-art semiconductor cluster in Texas, including an advanced packaging unit, and two top-notch logic fabs with $6.4 billion in US subsidies. Construction of the first fab commenced in 2022 with 4-nm process capabilities. Again, the plant has delayed its operation until 2026 due to delays in government subsidies and the downturn of the foundry market. Reports also suggested that this delay may help Samsung upgrade the process from 4nm to 2nm.
