Big Tech begs Congress to pass $52bn chip subsidies bill
(2022/06/15)
- Reference: 1655313966
- News link: https://www.theregister.co.uk/2022/06/15/big_tech_congress/
- Source link:
Big Tech in America has had enough of Congress' inability to pass pending legislation that includes tens of billions of dollars in subsidies to boost semiconductor manufacturing and R&D in the country.
In a letter
"The rest of the world is not waiting for the US to act. Our global competitors are investing in their industry, their workers, and their economies, and it is imperative that Congress act to enhance US competitiveness," said the letter.
[2]
Organized by the Semiconductor Industry Association, the missive is also signed by top executives in the semiconductor industry, including AMD CEO Lisa Su, Intel CEO Pat Gelsinger, GlobalFoundries CEO Thomas Caufield, Micron Technology CEO Sanjay Mehrotra, and Nvidia General Counsel Timothy Teter.
[3]
[4]
[5]The association said it hopes the final legislation will include a measure for investment tax credits that semiconductor manufacturing and design companies can advantage of in addition to the $52 billion in chip subsidies that has been the heart of the bill.
Letter comes after months of no progress
The letter is yet another sign of frustration from tech executives after a US competitiveness bill has stalled in Congress for several months. The House of Representatives passed its version of the legislation in February while the Senate passed its version in June 2021, but the Senate and House have been attempting to reconcile differences in their respective chip subsidies bills, but such efforts have faltered recently.
"We've already wasted several quarters since the Senate acted last year, and now it's time for us to move forward rapidly," Intel's [6]Gelsinger told Congress back in March.
At issue is the problem that the US has been trailing Asian countries in the past few decades in semiconductor manufacturing. This has resulted in the US share of chipmaking falling from 37 percent in 1990 to 12 percent today. Meanwhile, 80 percent of chip production happens in Asia.
[7]
Tech companies and government officials have pushed for chip subsidies for multiple reasons: fighting against future chip shortages and inflation; reducing reliance on chipmakers in Asia; hedging against future geopolitical instability, particularly in light of concerns about Chinese aggression against Taiwan; and growing US manufacturing jobs.
The long and winding road
[8]Bloomberg reported last week that the legislation "risks collapsing in Congress" in the face of increased skepticism from Republicans, plus the fact that the country is facing other issues, like the seemingly never-ending problem of [9]gun violence .
Bloomberg's report said there are concerns from some Democrats and Republicans that the White House hasn't been doing enough to rally Congress, particularly House members, around the bill. At the same time, White House officials complained that the private sector hasn't done enough in communicating to politicians the importance of passing the bill.
[10]Proposed Innovation Act amendment would block US investment in China
[11]Chipmakers to spend record $109b on fab machines this year
[12]Intel details advances to make upcoming chips faster, less costly
[13]Intel to get $7.3b for Germany fab site as TSMC dismisses Europe plans
That complaining seemed to work, given that the Semiconductor Industry Association managed to get executives at more than 120 companies to sign Wednesday's letter. While the letter is rather short, it got to the point in the second paragraph:
The competitiveness legislation pending in Congress is critical to the U.S. economy, national security, and supply chain resilience. The bill includes important measures to invest in research and technology leadership, workforce development, and domestic manufacturing and strengthened supply chains, including investments in key areas such as semiconductors vital to our entire economy.
Foreign chip giants want US subsidies too
While many of the signatories of the Wednesday letter represent US companies, there are a few foreign firms represented too, most notably chip foundry giants TSMC and Samsung.
The two Asian semiconductor behemoths are hoping to get their share of US chip subsidies since Taiwan-based TSMC and South Korea's Samsung are in the midst of multibillion-dollar plans to build new manufacturing plants in [14]Arizona and [15]Texas , respectively.
The companies, which have benefited from generous support in their home countries, [16]spoke out in March about the need for the US to consider foreign firms when giving out chip cash. The concerns were made after Intel once proposed that the funding only be used for domestic companies, a matter that the x86 giant has since become silent on.
"Arbitrary favoritism and preferential treatment based on the location of a company's headquarters is not an effective or efficient use of the grant and ignores the reality of public ownership for most of the leading semiconductor companies," TSMC said in a statement to the US Department of Commerce in March.
[17]
In all, there are a lot of companies, both foreign and domestic, that are hoping the US will use taxpayer dollars to boost chip manufacturing and research. But we understand why it's been difficult to make the bill a priority, given several compounding issues facing the US, including [18]gun violence , inflation, and [19]attempts to subvert democracy , just to name a few. ®
Get our [20]Tech Resources
[1] https://www.semiconductors.org/wp-content/uploads/2022/06/June-15-2022_CEO-letter-on-competitiveness-bill.pdf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YqpWgt5rNPW9yosgOqocXAAAAA4&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YqpWgt5rNPW9yosgOqocXAAAAA4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YqpWgt5rNPW9yosgOqocXAAAAA4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.semiconductors.org/sia-commends-house-passage-of-critical-semiconductor-manufacturing-and-research-investments/
[6] https://www.theregister.com/2022/03/24/intel_chips_subsidy/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YqpWgt5rNPW9yosgOqocXAAAAA4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.bloomberg.com/news/articles/2022-06-09/biden-s-52-billion-chip-plan-sputters-as-lawmakers-eye-election
[9] https://www.npr.org/2022/06/12/1104433332/gun-control-senate-deal
[10] https://www.theregister.com/2022/06/14/innovation_act_investment/
[11] https://www.theregister.com/2022/06/13/global_semiconductor_spending/
[12] https://www.theregister.com/2022/06/13/intel_4_chips/
[13] https://www.theregister.com/2022/06/08/intel_germany_tsmc/
[14] https://www.theregister.com/2021/07/16/tsmc_q2_2021_intel_globalfoundries_acquisition/
[15] https://www.theregister.com/2021/11/24/samsung_picks_taylor_texas_for_fab/
[16] https://www.theregister.com/2022/03/28/tsmc_samsung_chip_subsidies/
[17] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YqpWgt5rNPW9yosgOqocXAAAAA4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[18] https://www.gunviolencearchive.org/
[19] https://www.nytimes.com/2022/06/15/us/politics/election-deniers-midterms.html
[20] https://whitepapers.theregister.com/
In a letter
[1]PDF
sent to Senate and House leaders Wednesday, the CEOs of Alphabet, Amazon, Dell, IBM, Microsoft, Salesforce, VMware, and dozens of other tech and tech-adjacent companies urged the two chambers of Congress to reach consensus on a long-stalled bill they believe will make the US more competitive against China and other countries."The rest of the world is not waiting for the US to act. Our global competitors are investing in their industry, their workers, and their economies, and it is imperative that Congress act to enhance US competitiveness," said the letter.
[2]
Organized by the Semiconductor Industry Association, the missive is also signed by top executives in the semiconductor industry, including AMD CEO Lisa Su, Intel CEO Pat Gelsinger, GlobalFoundries CEO Thomas Caufield, Micron Technology CEO Sanjay Mehrotra, and Nvidia General Counsel Timothy Teter.
[3]
[4]
[5]The association said it hopes the final legislation will include a measure for investment tax credits that semiconductor manufacturing and design companies can advantage of in addition to the $52 billion in chip subsidies that has been the heart of the bill.
Letter comes after months of no progress
The letter is yet another sign of frustration from tech executives after a US competitiveness bill has stalled in Congress for several months. The House of Representatives passed its version of the legislation in February while the Senate passed its version in June 2021, but the Senate and House have been attempting to reconcile differences in their respective chip subsidies bills, but such efforts have faltered recently.
"We've already wasted several quarters since the Senate acted last year, and now it's time for us to move forward rapidly," Intel's [6]Gelsinger told Congress back in March.
At issue is the problem that the US has been trailing Asian countries in the past few decades in semiconductor manufacturing. This has resulted in the US share of chipmaking falling from 37 percent in 1990 to 12 percent today. Meanwhile, 80 percent of chip production happens in Asia.
[7]
Tech companies and government officials have pushed for chip subsidies for multiple reasons: fighting against future chip shortages and inflation; reducing reliance on chipmakers in Asia; hedging against future geopolitical instability, particularly in light of concerns about Chinese aggression against Taiwan; and growing US manufacturing jobs.
The long and winding road
[8]Bloomberg reported last week that the legislation "risks collapsing in Congress" in the face of increased skepticism from Republicans, plus the fact that the country is facing other issues, like the seemingly never-ending problem of [9]gun violence .
Bloomberg's report said there are concerns from some Democrats and Republicans that the White House hasn't been doing enough to rally Congress, particularly House members, around the bill. At the same time, White House officials complained that the private sector hasn't done enough in communicating to politicians the importance of passing the bill.
[10]Proposed Innovation Act amendment would block US investment in China
[11]Chipmakers to spend record $109b on fab machines this year
[12]Intel details advances to make upcoming chips faster, less costly
[13]Intel to get $7.3b for Germany fab site as TSMC dismisses Europe plans
That complaining seemed to work, given that the Semiconductor Industry Association managed to get executives at more than 120 companies to sign Wednesday's letter. While the letter is rather short, it got to the point in the second paragraph:
The competitiveness legislation pending in Congress is critical to the U.S. economy, national security, and supply chain resilience. The bill includes important measures to invest in research and technology leadership, workforce development, and domestic manufacturing and strengthened supply chains, including investments in key areas such as semiconductors vital to our entire economy.
Foreign chip giants want US subsidies too
While many of the signatories of the Wednesday letter represent US companies, there are a few foreign firms represented too, most notably chip foundry giants TSMC and Samsung.
The two Asian semiconductor behemoths are hoping to get their share of US chip subsidies since Taiwan-based TSMC and South Korea's Samsung are in the midst of multibillion-dollar plans to build new manufacturing plants in [14]Arizona and [15]Texas , respectively.
The companies, which have benefited from generous support in their home countries, [16]spoke out in March about the need for the US to consider foreign firms when giving out chip cash. The concerns were made after Intel once proposed that the funding only be used for domestic companies, a matter that the x86 giant has since become silent on.
"Arbitrary favoritism and preferential treatment based on the location of a company's headquarters is not an effective or efficient use of the grant and ignores the reality of public ownership for most of the leading semiconductor companies," TSMC said in a statement to the US Department of Commerce in March.
[17]
In all, there are a lot of companies, both foreign and domestic, that are hoping the US will use taxpayer dollars to boost chip manufacturing and research. But we understand why it's been difficult to make the bill a priority, given several compounding issues facing the US, including [18]gun violence , inflation, and [19]attempts to subvert democracy , just to name a few. ®
Get our [20]Tech Resources
[1] https://www.semiconductors.org/wp-content/uploads/2022/06/June-15-2022_CEO-letter-on-competitiveness-bill.pdf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YqpWgt5rNPW9yosgOqocXAAAAA4&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YqpWgt5rNPW9yosgOqocXAAAAA4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YqpWgt5rNPW9yosgOqocXAAAAA4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.semiconductors.org/sia-commends-house-passage-of-critical-semiconductor-manufacturing-and-research-investments/
[6] https://www.theregister.com/2022/03/24/intel_chips_subsidy/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YqpWgt5rNPW9yosgOqocXAAAAA4&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.bloomberg.com/news/articles/2022-06-09/biden-s-52-billion-chip-plan-sputters-as-lawmakers-eye-election
[9] https://www.npr.org/2022/06/12/1104433332/gun-control-senate-deal
[10] https://www.theregister.com/2022/06/14/innovation_act_investment/
[11] https://www.theregister.com/2022/06/13/global_semiconductor_spending/
[12] https://www.theregister.com/2022/06/13/intel_4_chips/
[13] https://www.theregister.com/2022/06/08/intel_germany_tsmc/
[14] https://www.theregister.com/2021/07/16/tsmc_q2_2021_intel_globalfoundries_acquisition/
[15] https://www.theregister.com/2021/11/24/samsung_picks_taylor_texas_for_fab/
[16] https://www.theregister.com/2022/03/28/tsmc_samsung_chip_subsidies/
[17] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YqpWgt5rNPW9yosgOqocXAAAAA4&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[18] https://www.gunviolencearchive.org/
[19] https://www.nytimes.com/2022/06/15/us/politics/election-deniers-midterms.html
[20] https://whitepapers.theregister.com/
Re: Why Always Subsidies?
Anonymous Coward
Pretty sure the major tech companies ain't broke... they can afford to build the facilities. Finding employees to staff them could be a problem.
Re: Why Always Subsidies?
vekkq
in china, you can produce cheaper. owning parts of the company doesn't solve the issue, that you won't be able to make and sell chips, that you can push down to market prices. only with subsidies can you do that and they will have to be renewed frequently too. a high price to pay for independence.
Re: Why Always Subsidies?
Yet Another Anonymous coward
>in china, you can produce cheaper.
Actually in this case in Taiwan and Korea you can produce cheaper.
Perhaps somebody could read "On the Principles of Political Economy and Taxation" ?
Please, they are NOT
Lis
subsidies. That's for the world outside the United States Often in the same sentence as the word "sanctions" and "Unfair".
In the United States they are known as "economic incentives".
Cheers... Ishy
Re: Please, they are NOT
Yet Another Anonymous coward
Subsidies - because only socialism works !
We is only billionaires
VoiceOfTruth
Please give us more money.
Anonymous Coward
If they need $50 billion to invest in chip fabs, then sell $50 billion in stock to the government. Why the fuck should they just be given that money for free?
Yet Another Anonymous coward
It wasn't for free - each $Bn costs them $100K in campaign contributions.
You are however making the rookie mistake of assuming that the $50Bn subsidy for chip fabs will be spent on chip fabs and not share buy backs or executive compensation
Ace2
Some of the richest companies that have ever existed
Why Always Subsidies?
If the taxpayers are going to pay for a fabrication facility, I think they ought to own part of it.
How about the chip manufacturers issue $50 billion worth of new shares of stock which the U.S. government purchases on the condition that the new capital is used to invest in new fabrication facilities in the U.S.?