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Analysis: Money no object as governments race to build chip arsenals
By Douglas Busvine, Mathieu Rosemain
6 MIN READ
Governments in the United States, the European Union and Japan are contemplating spending tens of billions of dollars on cutting-edge “fabs,” or chip fabrication plants, as unease grows that more than two-thirds of advanced computing chips are manufactured in Taiwan. Earlier this week, a top U.S. military commander told U.S. lawmakers that a Chinese takeover of the island was the military’s foremost concern in the Pacific.
(Reuters) - Governments around the world are subsidizing the construction of semiconductor factories as a chip shortage hobbles the auto and electronics industries and highlights the world’s singular dependence on Taiwan for vital supplies.
The need for chip plants outside Asia has helped prompt Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung Electronics Co Ltd - the only two chip contract manufacturers capable of making the most advanced computing chips - to draw up plans for new factories in the United States and vie for what could be $30 billion or more in U.S. subsidies.
And Intel Corp, another of the “Big Three” which also makes cutting edge chips, dramatically changed the playing field on Tuesday when it disclosed plans to throw open its factory doors to outside customers and build a new factory in Europe in addition to two new ones in the United States.
The net result could be a government-backed restructuring of the semiconductor industry after decades in which American and European chip firms outsourced their manufacturing to Taiwan and Korea in the name of efficiency and delivering ever cheap computing power to billions of people.
“We’re in a situation now where every country is going to want to build their own fab,” Dan Hutcheson, chief executive officer of VLSI Research, told Reuters. “We’re going from this global interconnectedness to vertical silos everywhere.”
Lawmakers in the United States, meanwhile, are preparing to authorize $30 billion or more for chip investments via an existing Pentagon funding bill and a clutch of new measures being championed by Senate Majority Leader Chuck Schumer.
Local officials, as well as the companies, are already scrambling for the bounty. Intel this week committed to Arizona, which has a generous state tax-abatement program as well as an established chip-making ecosystem, and analysts expect it to be a big recipient of the federal funds. TSMC has also agreed to build a $12 billion fab in Arizona, partly at the behest of the Trump Administration. Samsung, for its part, is negotiating a second factory in Austin, Texas.
www.reuters.com
First of all, it's important to point out that we have a military commander worried about a Chinese takeover of Taiwan, as if it's a foregone conclusion that the world would just sit back and do nothing. That may be possible, but it doesn't speak well for the free world, never mind a commander that thinks that the US president would just sit on his thumbs.
Secondly, notice where all the fed money is going to be parked?? That's right. In states that favor business with either a tax-abatement program or a low tax incentive.
Personally, I think - regardless of the 80's risk - it's important to bring this industry home. Regardless of the irony, Bravo, Biden. And Bravo low taxes. Thanks!!
By Douglas Busvine, Mathieu Rosemain
6 MIN READ
Governments in the United States, the European Union and Japan are contemplating spending tens of billions of dollars on cutting-edge “fabs,” or chip fabrication plants, as unease grows that more than two-thirds of advanced computing chips are manufactured in Taiwan. Earlier this week, a top U.S. military commander told U.S. lawmakers that a Chinese takeover of the island was the military’s foremost concern in the Pacific.
(Reuters) - Governments around the world are subsidizing the construction of semiconductor factories as a chip shortage hobbles the auto and electronics industries and highlights the world’s singular dependence on Taiwan for vital supplies.
The need for chip plants outside Asia has helped prompt Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung Electronics Co Ltd - the only two chip contract manufacturers capable of making the most advanced computing chips - to draw up plans for new factories in the United States and vie for what could be $30 billion or more in U.S. subsidies.
And Intel Corp, another of the “Big Three” which also makes cutting edge chips, dramatically changed the playing field on Tuesday when it disclosed plans to throw open its factory doors to outside customers and build a new factory in Europe in addition to two new ones in the United States.
The net result could be a government-backed restructuring of the semiconductor industry after decades in which American and European chip firms outsourced their manufacturing to Taiwan and Korea in the name of efficiency and delivering ever cheap computing power to billions of people.
“We’re in a situation now where every country is going to want to build their own fab,” Dan Hutcheson, chief executive officer of VLSI Research, told Reuters. “We’re going from this global interconnectedness to vertical silos everywhere.”
Lawmakers in the United States, meanwhile, are preparing to authorize $30 billion or more for chip investments via an existing Pentagon funding bill and a clutch of new measures being championed by Senate Majority Leader Chuck Schumer.
Local officials, as well as the companies, are already scrambling for the bounty. Intel this week committed to Arizona, which has a generous state tax-abatement program as well as an established chip-making ecosystem, and analysts expect it to be a big recipient of the federal funds. TSMC has also agreed to build a $12 billion fab in Arizona, partly at the behest of the Trump Administration. Samsung, for its part, is negotiating a second factory in Austin, Texas.
Analysis: Money no object as governments race to build chip arsenals
Governments around the world are subsidizing the construction of semiconductor factories as a chip shortage hobbles the auto and electronics industries and highlights the world's singular dependence on Taiwan for vital supplies.
www.reuters.com
First of all, it's important to point out that we have a military commander worried about a Chinese takeover of Taiwan, as if it's a foregone conclusion that the world would just sit back and do nothing. That may be possible, but it doesn't speak well for the free world, never mind a commander that thinks that the US president would just sit on his thumbs.
Secondly, notice where all the fed money is going to be parked?? That's right. In states that favor business with either a tax-abatement program or a low tax incentive.
Personally, I think - regardless of the 80's risk - it's important to bring this industry home. Regardless of the irony, Bravo, Biden. And Bravo low taxes. Thanks!!
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