Chipmakers Will Abandon Plans for US Plants Unless Congress Passes $52 Billion Funding, Warns Raimondo

By Naveen Athrappully
Naveen Athrappully
Naveen Athrappully
Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.
June 28, 2022Updated: June 28, 2022

U.S. Commerce Department Secretary Gina Raimondo urged lawmakers to quickly approve $52 billion in funding for chipmakers as multiple companies have stalled their expansion plans in the country.

“Mark my words … if Labor Day comes and goes and this Chips Act isn’t passed by Congress, these companies will not wait and they will expand in other countries,” Raimondo said in an interview with CNBC. The CHIPS Act was passed by Congress in January 2021 but there has yet to be any funding budgeted for it.

The act will provide companies with financial incentives to build chipmaking plants in the United States, thereby making such investments more attractive.

Taiwan’s GlobalWafers announced plans to build a silicon manufacturing plant in Sherman, Texas, at a cost of $5 billion. However, the company’s CEO informed Raimondo that the investment was contingent on Congress approving the $52 billion incentive package.

Taiwan Semiconductor Manufacturing Corp. (TSMC), the largest contract chip manufacturer in the world, announced a $12 billion plant in Phoenix back in 2020. CEO Mark Liu stated that the company is hoping for U.S. federal and state governments to “make up TSMC’s running costs difference between the United States and Taiwan,” according to Reuters.

In June, TSMC called for Washington to extend the CHIPS support package, which is aimed at domestic companies, to cover foreign firms as well.

Intel has also pushed for passing the CHIPS Act. “As the world comes to grips with chip shortages due to supply chain disruptions and ripple-effects from the global pandemic, Intel’s leaders are urging Congress to fund the CHIPS for America Act to create a more stable future for the U.S. tech industry,” the company said in a June 8 news release.

Passing the Legislation

Business lobbyists who pushed for the bill are said to be frustrated with the Biden administration, according to Bloomberg. Republican supporters of the bill claim that Biden’s team has been less forceful on House Democrats with regard to the bill.

The $52 billion funding sits inside broader bills aimed at boosting America’s economic competitiveness amidst growing competition from other nations like China. Though the matter of semiconductor subsidies has strong support in both chambers, disagreement crops up when it comes to other issues in these bills.

In a letter written to Senate and House leaders on June 15, chief executives of over 100 tech firms warned that “the rest of the world is not waiting for the U.S. to act. Our global competitors are investing in their industry, their workers, and their economies, and it is imperative that Congress act to enhance U.S. competitiveness.”

Semiconductor companies wanting to invest in the United States are being courted by nations like South Korea and Germany, which are already offering many subsidies.