House bill

A domestic bill funding semiconductor manufacturing could give a boost to tech companies pushing chip shortage concerns

(Drew Angerer via Getty Images)

The House of Representatives recently passed the America COMPETES Act which aims to make the United States more competitive with other countries like China. It includes provisions of the CHIPS for America Act that would award $52 billion to semiconductor chipmakers in a bid to bring chip production back to the United States as demand for the technology grows. The bill would also give a boost to tech companies like Advanced Micro Devices (AMD), Samsung and Intel, all of which have spent money to lobby for issues facing the semiconductor chip industry. faced last year.

AMD began pushing for the CHIPS for America Act in 2020, when it spent a total of $1.7 million on lobbying. In 2021, AMD spent over $4 million lobbying on business issues, such as the CHIPS for America Act, and science and technology issues. AMD was able to maintain a steady supply of chips thanks to the fact that they were able set up contracts before the shortage, and that 29 of their operations are located in the Asia-Pacific region compared to the 11 operations in the United States

Samsung, an electronics company based in South Korea, also had the CHIPS for America Act among its lobbying plans. In 2020, Samsung spent over $3.3 million on lobbying, with over $1 million spent in the third quarter in total. The company’s spending rose slightly to $3.7 million in 2021 and pressured telecommunications and manufacturing issues. Last year, Samsung also announced that the company would build a 17 billion dollar factory in Texas to tackle the chip shortage, hoping to have it working by 2024.

Intel also lobbied for the CHIPS for America Act, starting in 2020 when the company’s total exceeded $3 million. Last year, the American multinational technology company spent more than $4 million lobbying on a range of issues, including chip shortages, telecommunications, science and technology.

Like Samsung, Intel plans to spend big to tackle chip shortages, with $20 billion budgeted to build two manufacturing sites in Ohio. Construction is expected to begin this year and should be operational by 2025.

Last year, the Senate pass a similar bill called the US Innovation and Competition Act which also included tackling the chip shortage. Like the House bill, it would provide $52 billion in funding for chip manufacturing in the United States. With two bills dealing with the same issues, the next step would be for the Senate and the House to reconcile their bills and then send the final version to President Joe Biden for his signature.

US investment and chip manufacturing projects have been weak, especially compared to other countries. Last year, several countries announced 25 expansions and projects while the United States has announced only four. The United States is a world leader in many areas, but has fallen 25% in three decades when it comes to chipmaking capacity. Meanwhile, China is expected to have the largest chip production by 2030 according to the Semiconductor Industry Association.

Other countries also have their own incentives. China, for example, has adopted multiple exemptions and low-interest loans granted to chipmakers. The objective is to continue to promote its integrated circuit industry, which increased the country’s chip salessurpassing Taiwan and reaching the European level in January 2020.

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