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Intel and AMD Ask for Government ‘Funding for Incentives’ – Meanwhile, Apple Chipmaking Partner TSMC Expanding to Meet Demand

Reuters reports that a group of U.S. chipmakers – including AMD, Intel, Qualcomm, and AMD – today sent a letter to U.S. President Joe Biden requesting “funding for incentives.” Meanwhile, Apple chip supplier TSMC is expanding its production capabilities to meet increased chip demand.

The letter requested that “substantial funding for incentives for semiconductor manufacturing” be included in his economic recovery and infrastructure plans. The letter noted that the United States’ share of semiconductor manufacturing has dropped from 37% in 1990 to its current 12% share.

This is largely because the governments of our global competitors offer significant incentives and subsidies to attract new semiconductor manufacturing facilities, while the U.S. does not.

Working with Congress, your administration now has a historic opportunity to fund these initiatives to make them a reality. We believe bold action is needed to address the challenges we face. The costs of inaction are high.

While subsidies for chip and semiconductor research and manufacturing have been authorized by the U.S. Congress, the exact amount of funding has not yet been agreed on.

Intel is faced with a number of problems, including that of major customer Apple moving its entire Mac lineup to run on its own custom Apple Silicon, Microsoft is expected to make a similar move in the near future. Intel has been faced with numerous production delays with its new processors. Meanwhile, competitor AMD has gained valuable market share.

A global shortage of chips has hampered the game console, automotive, and other electronics-related firms. The majority of the supply for chips comes from Korea and Taiwan, two players that have come to dominate the market in recent years.

While U.S. chipmakers go hat in hand to the President looking for help, EETimes today reported that Apple chipmaker partner TSMC is raising $9 billion from bonds to expand production. The company has approved the establishment of a $186 million subsidiary in Japan to expand research on materials for three-dimensional chips.

TSMC announced in May that it will build and operate an advanced semiconductor factory in Arizona. Construction is planned to start in 2021, with production targeted to begin in 2024.

The facility is expected to turn out approximately 20,000 chips per month using TSMC’s latest 5-nanometer fabrication process. The facility is expected to create over 1,600 high-tech professional jobs directly, and thousands of indirect jobs in the semiconductor ecosystem.

TSMC’s total spending on the project, including capital expenditure, will be approximately $12 billion USD from 2021 to 2029.