Few things cost more than a computer chip plant.
Two Intel factories under construction in Arizona will run $10 billion apiece – each as much as a dozen NFL stadiums. Just a handful of companies in the world can afford to spend that much, and some do it with considerable help from their governments.
Asian nations pour billions of dollars into their semiconductor industries, and competitors in the United States and Europe say those tax breaks and government subsidies explain why those countries dominate chip manufacturing.
Now, the domestic semiconductor industry wants U.S. taxpayers to chip in, too.
Bipartisan legislation before Congress would direct $52 billion to subsidize construction of new factories across the country. The proposal, known as the CHIPS Act, also provides billions for American companies’ research into the semiconductor technologies of tomorrow.
“It’s a competition between companies as much as it is a competition between nations,” said Al Thompson, Intel’s vice president for government relations. He said the federal money would give the U.S. the opportunity to reassert technological leadership.
For Intel, the need is all the more urgent as it commits tens of billions of dollars to build new factories – the industry calls them fabs – and overcome a decade of manufacturing failures. In addition to the two new Arizona factories, Intel says it’s close to choosing sites for a factory in Europe and a site somewhere new in the U.S.
Intel expects to spend up to $28 billion on its fabs in 2022, up from around $19 billion this year, as it races to expand with leading-edge facilities. The price tag has alarmed investors, and Intel is counting on several billion dollars from the CHIPS Act to help offset its costs.
The comeback plan represents a bet-the-company moment for Intel and its new CEO, Pat Gelsinger, who will be in Portland on Monday to take up the cause at the Oregon Business Plan’s annual leadership summit. Oregon is home to Intel’s largest and most advanced operations, but Monday’s talk will be the first time an Intel CEO has addressed a public audience in the state in more than a decade.
The CHIPS Act is a rarity in American politics, a major piece of new spending that has broad support from both Democrats and Republicans, who are united by concerns over the billions of dollars China is spending to create its own chip industry. Both the Trump and Biden administrations championed the legislation.
However, after the Senate approved the money in June — as part of a larger package aimed at making the U.S. more competitive technologically — the legislation stalled in the House as the chamber wrestled over other priorities.
Political observers expect the subsidies will pass in some form, either late this year or early in 2022. Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung are building new fabs in Arizona and Texas, respectively, reflecting the confidence those companies have that the U.S. will help pay for them.
That could be evidence