The U.S. government will provide $52 billion in financing to U.S. semiconductor manufacturers to strengthen the local semiconductor industry and lay the groundwork for a revival of the U.S. semiconductor industry. But to get billions of dollars from the government, companies have to agree to various terms. This includes not expanding manufacturing in China, sharing profits, and providing affordable childcare.
U.S. semiconductor makers that receive funding from the CHIPS fund will reportedly have to agree not to expand production capacity in China for 10 years after receiving the funding. financial timesThis isn’t the only measure designed to limit American chip makers receiving money, and indicates that the U.S. government reserves the right to expand the list of provisions beyond China.
U.S. Commerce Secretary Gina Raimond said, “Recipients must enter into agreements limiting their ability to expand semiconductor manufacturing capacity in foreign countries of interest for 10 years after receiving funding.” “[Recipients must not] knowingly engage in collaborative research or technology licensing efforts with interested foreign parties involving sensitive technology or products; ”
The US government has no intention of funding these fab projects in their entirety. Grants are projected to total 5% to 15% of capital expenditure per project and not exceed 35% of the total cost of the product. Meanwhile, the company will be able to apply for a tax credit that will reimburse him 25% of the construction costs of the project. new york timesBearing in mind that a modern fab can still cost upwards of $10 billion, this is still a lot of money.
Companies that win government subsidies hit certain milestones on time, refrain from stock buybacks (because the Commerce Department prefers to fund companies that don’t), and afford workers affordable prices. childcare must be provided. Additionally, companies will have to share any unexpected excess profits with the government, a move to keep companies from overstating the costs of these projects.
For now, the Department of Commerce has issued general guidelines for companies seeking government funding and plans to disclose more detailed rules in the coming weeks.
“We will be releasing very detailed regulations in the coming weeks, which will give businesses a clearer understanding of what the red lines are,” Raimondo said. Reuters.
