Raimundo warns chipmakers will abandon plans for American plants unless Congress approves $52 billion in funding

US Commerce Secretary Gina Raimondo urged lawmakers to quickly approve $52 billion in funding for chip makers as several companies halted their expansion plans in the country.

“Mark my words…if Labor Day comes and goes and this chip bill isn’t passed by Congress, these companies won’t wait and will expand into other countries,” Raimondo said in an interview with CNBC. CHIPS was passed by Congress in January 2021 but there is still no budget funding for it.

The law will provide companies with financial incentives to build chip factories in the United States, making such investments more attractive.

Taiwanese company GlobalWafers has announced plans to build a $5 billion silicon manufacturing plant in Sherman, Texas. However, CEO Raimondo told the company that the investment is subject to Congressional approval of the $52 billion stimulus package.

Taiwan Semiconductor Manufacturing Corp (TSMC), the world’s largest contract chip maker, has announced a $12 billion plant in Phoenix in 2020. CEO Mark Liu said the company hopes the US federal and state governments will “compensate” TSMC’s operating cost difference between the United States and Taiwan,” according to Reuters.

In June, TSMC called on Washington to extend the CHIPS support package, aimed at domestic companies, to include foreign companies as well.

Intel also pushed to pass the CHIPS Act. “As the world faces chip shortages due to supply chain disruptions and the effects of the global pandemic, Intel leaders are urging Congress to fund CHIPS for America to create a more stable future for the American technology industry,” the company said in a press release on June 8.

pass the legislation

According to Bloomberg, business lobbyists who pushed for the bill are frustrated with the Biden administration. Republican supporters of the bill claim that Biden’s team has been less robust toward House Democrats on the bill.

The $52 billion in funding is housed within broader bills aimed at boosting America’s economic competitiveness amid increased competition from other countries such as China. Although the issue of semiconductor subsidies has strong support in both houses, disagreement emerges when it comes to other issues in these bills.

In a letter written to Senate and House leaders on June 15, the chief executives of more than 100 tech companies warned that “the rest of the world is not waiting for the United States to act. Our global competitors are investing in their industry, their workers, and their economies, and it is imperative that Congress work to bolster competitiveness.” to the United States.”

Semiconductor companies that want to invest in the United States are handled by countries such as South Korea and Germany, which already offer several subsidies.