Chipmakers Warn About U.S. Fabs Delays if CHIPS Act Not Passed Soon
If the US Senate fails to pass the government’s semiconductor manufacturing subsidy bill in the coming weeks, GlobalFoundries and Intel may need to delay the rollout of new fabs. The building itself is likely to be built, but it will not be equipped with manufacturing tools without a US subsidy.
Thomas Caulfield, CEO of GLOBALFOUNDRIES, said Reuters this week. “We are generating good free cash flow, but we need to build a balance sheet to make those investments.”
Meanwhile, the CHIPS Act reports that it passed the first procedural barrier in the U.S. Senate on Tuesday, paving the way for its widespread debate and final approval. Seeking alpha..
Last year, GlobalFoundries allocated $ 1 billion to expand Fab 8’s capacity in Malta, NY. The company announced that it will build a new fab in the state to further strengthen its manufacturing capacity. However, to build that fab, GlobalFoundries needs government subsidies to quickly build and equip the facility. Without support, foundries that manufacture chips for use by the military and other organizations that are critical to US national security and the economy will need to slow down the project.
Thomas Colefield is not the CEO of the first U.S. semiconductor company to warn U.S. lawmakers about possible delays in new fab projects because the CHIPS law proposed in early 2021 has not yet become a law. .. About a week ago, Intel CEO Pat Gelsinger said that if the U.S. did not pass the proper semiconductor manufacturing subsidy law, it could build a new megasite in Europe instead of Ohio. Said.
Companies like Intel and GlobalFoundries need to acquire capabilities in the United States to compete with South Korean and Taiwan-based chip producers, but the government is expensive to build fabs in the United States. It requires a great deal of funding from, but the latter cannot act before the legislator has passed the appropriate legislation.
Under the CHIPS Act, the United States provides chip makers that manufacture microelectronics in the United States with $ 52 billion in subsidies, grants, tax credits, and various incentives. For the United States, it is important to produce more chips locally, as it can boost the economy and modern high-tech weapons use a variety of microelectronic components, which is a national security issue.
For companies such as Intel, GlobalFoundries, TSMC and Samsung Foundry, US government grants are essential to build new fabs in the country sooner or later. Without federal and local support, these companies would not be able to fund the project as quickly as they would like. The latest advanced fabs cost well over $ 10 billion in a single phase. Meanwhile, Intel says the Ohio megasite, which will house both semiconductor fabs and advanced packaging facilities, will require a $ 100 billion investment to fully build.