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Biden To Congress: Pass The Bill To Fund US Chip Manufacturing (cnet.com) 175

Posted by msmash from the get-it-done dept.
President Joe Biden called on Congress to pass the CHIPS Act, a law that would provide chipmakers with $52 billion in subsidies to advance semiconductor manufacturing in the United States, during his State of the Union speech Tuesday. From a report: Biden lauded Intel Chief Executive Pat Gelsinger, who last month announced a $20 billion investment for two new chip fabrication facilities, or fabs, that the company will build just west of Columbus, Ohio. Intel plans to spend $100 billion to build the Ohio "megafab" over the next decade, with an eventual total of eight fabs, but the speed of that investment will depend on the US subsidy, Gelsinger has said.

"Intel's CEO, Pat Gelsinger, who is here tonight, told me they are ready to increase their investment from $20 billion to $100 billion. That would be one of the biggest investments in manufacturing in American history," Biden said. "And all they're waiting for is for you to pass this bill. ... Send it to my desk. I'll sign it." The Senate passed a bill funding the CHIPS Act in 2021, and the House of Representatives followed suit in February, but the differences in the bills haven't been ironed out in committee and the subsidy hasn't arrived despite some bipartisan support. The funding would help the US compete with government help in Taiwan and South Korea, where leading chipmakers Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung have the bulk of their operations. The US subsidies would knock about $3 billion off the $10 billion price tag for a new fab, a subsidy level Intel says matches those in Asia.
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Biden To Congress: Pass The Bill To Fund US Chip Manufacturing More

Biden To Congress: Pass The Bill To Fund US Chip Manufacturing

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  • Yes (Score:2)

    by pele ( 151312 )

    Let's subsidse an industry that provides billions to a single person and skims the workers and taxpayers, why not.

  • They should just stop buying back their stock (Score:5, Insightful)

    by BetterSense ( 1398915 ) on Wednesday March 02, 2022 @09:10AM (#62318337)
    Intel alone has spent 20 billion over the last ten years buying back it's own stock. It could have easily spent that money buying more capital, but it decided not to. Tell me again why the government needs to give them billions now so they can invest in capital? If investing in US fabs was a bad investment for the last ten years, why is it a good investment now?

    What we need is to understand the reasons companies opt not to invest domestically, and remove those barriers by policy. Not just hand out billions of dollars to companies who objectively don't actually need it.

    • remove Healthcare from jobs and then costs go down to have people work in the usa.

    • Re: (Score:3)

      by Teckla ( 630646 )

      If investing in US fabs was a bad investment for the last ten years, why is it a good investment now?

      You're oversimplifying things.

      Sometimes countries need to ensure critical industries at home remain available, viable, and healthy in case of global economic disruption, such as the global economic disruption caused by Covid-19.

      These critical industries might not be a good investment in terms of profit and loss, especially when you have other countries willing to poison their environment and pay their workers slave wages. It makes economic sense (if not moral sense) to offshore outsource that work.

      But it ca

      • I'm 100% behind your argument. But if you want to encourage domestic investment for strategic reasons, this is not the way to do it. At best it's pointless and at worst it's counterproductive.

        Like it or hate it, look at ag policy for a contrast. The US spends tremendous amounts subsidizing ag, for ostensibly strategic reasons. But instead of simply handing billions to say, Tyson Chicken specifically, to have Tyson Chicken build a big complex of chicken barns that previously Tyson had the money to do, but di

        • Re: (Score:2)

          by Teckla ( 630646 )

          Simply handing out raw cash to certain players, who actually have the cash already, to have them build factories that previously weren't built for very specific reasons, without doing anything to fix those very specific reasons, its such bad policy that it's basically simple corruption with a strategic smoke-screen.

          I tend to agree with you, but unfortunately, the U.S. doesn't have any laws to force companies and CEOs to stop acting in the best interest of their profits and wallets, and to start acting in the best interest of the U.S.

          • You just gave a reason why the United States should not provide a subsidy. Take a moment to think about it. I'm sure you will figure it out why giving them money would be a bad thing...

          • Re: (Score:2)

            by uncqual ( 836337 )

            China has such policies and uses them effectively. Perhaps that approach is preferable?

        • Yeah, we should be supporting those mom-and-pop chip fabs!
          Agriculture is naturally distributed, and can be divided into arbitrarily small units. Chip fab requires big lump sum investments.

          • I work in the semiconductor industry. Intel is not the industry. There are many many small semiconductor companies, not just chip fabs but suppliers, in the US.

            Yes the big fabs like Intel will build require big investment, but Intel already has the money to make those lump-sum investments. But for the past decade or so they have opted not to make those investments in the US, they have opted to invest overseas instead. Why is that? I'm saying, to have actual effective policy, fix that problem by making it ec

      • Simple solution. Gov't to Intel: All that stock you were buying back? We'll buy it from you instead.

      • Re: (Score:2)

        by DarkOx ( 621550 )

        Sometimes countries need to ensure critical industries at home remain available, viable, and healthy in case of global economic disruption, such as the global economic disruption caused by Covid-19.

        Come on anyone with more than handful of brain cells that actually was in the semiconductor supply industry or was a direct consumer knew the risks and knew them for decades. These are little nobodies either these big plays like US automakers, Intel itself, that have lobbyists on the payroll.

        Literally everyone knew this going back to the worries about Japan in the 80s, and China since then. It just took til 2020-22 to get burned by it. The American people should really be asking why guys like Biden who hav

      • No that is not an over simplification. Those are the facts. Corporations like Intel have spent BILLIONS of dollars buying back stock. Money that should have been spent investing in their business.

        The United States DID NOT offshore businesses. BUSINESSES off-shored their operations. They sought cheap labor markets and they got that.

        Intel and other corporations can more than afford to invest in their own businesses. The problem is they will need to stop buying back stock and investors don't want t

    • Intel alone has spent 20 billion over the last ten years buying back it's own stock. It could have easily spent that money buying more capital, but it decided not to.

      Intel probably felt investment in its own stok offered a better return than building a factory. They can always sell the stock and use teh resultant cash to build a factory when it is a better investment.

      Tell me again why the government needs to give them billions now so they can invest in capital? If investing in US fabs was a bad investment for the last ten years, why is it a good investment now?

      A more robust supply chain that is less likely to be disrupted by geopolitical events; plus they will have one of the most modern facilities in the orld; assuming they go state of the art.

      What we need is to understand the reasons companies opt not to invest domestically, and remove those barriers by policy. Not just hand out billions of dollars to companies who objectively don't actually need it.

      We certainly need to look at the regulatory / policy structures as well.

      • And they were probably right with the information they had at the time. It's a shame that they didn't predict a two disruption on supply chains like you would have.

      • "Intel probably felt investment in its own stok offered a better return than building a factory. They can always sell the stock and use teh resultant cash to build a factory when it is a better investment."

        Holy Shit! That has to be one of the dumbest fucking things ever said. You are undoubtedly a fucking moron.

        When a company buys back stock, the shares of stock the company purchased are removed from trading. It's not an investment. It's a transfer of wealth from the business to the investor. The
    • Generally these investments don't turn out well. Just look at how Foxconn in Wisconsin turned out. Wisconsin had given them $2.85 billion in tax credits, the state has spent $200 million on road improvements, tax exemptions and grants to local governments for worker training and employment, and the village where the plant is located had paid just over $152 million for 132 properties to make way for Foxconn, plus $7.9 million in relocation costs. Then Foxconn announced it'll reduce its planned investment to

    • Re: (Score:2)

      by skam240 ( 789197 )

      If investing in US fabs was a bad investment for the last ten years, why is it a good investment now?

      Because Covid disruptions have caused us to realized having the these facilities overseas puts much of our modern economy at the mercy of overseas powers.

      What we need is to understand the reasons companies opt not to invest domestically, and remove those barriers by policy.

      So you mean things like cheap labor and lax environmental law? I don't think we want to turn the US into a third world nation just so Intel will make chips here themselves.

    • Re: (Score:2)

      by DarkOx ( 621550 )

      Its a good investment because; things are always great investments when you are not the one paying!

    • Re: (Score:2)

      by e3m4n ( 947977 )
      IMO, instead of the US giving out handouts, they should be considered investors. If our tax contributions fund development of something, why should we pay twice, once before production, and once for the product? Perhaps some level of reward or discount to the tax paying investor when the final product manifests. It could be something as simple as a mail-in rebate system for those eligible (such as providing an SSN and verification that your account with the irs is in good standing) sort of deal. The governm

    • Re: (Score:2)

      by uncqual ( 836337 )

      Intel sells the vast majority of its chips to foreign manufacturers. They can build and operate the fabs cheaper overseas - nearer their customers (which would be completely logical). This is an attempt to get them to "create good American jobs" with overpriced staff.

      There are no secrets on why companies don't opt to manufacture in the US - cost and availability of low skilled labor and over-regulation are at the top of the list.

      And, obviously, someone buying a computer or phone in the rest of the world com

    • Because other governments aggressively subsidize their semiconductor business, and the US is no longer ahead. If China is emboldened to take over Taiwan (see: Russia and Ukraine) we are going to be in a very bad place from a national security point of view. The money needs to be invested in moving forward the state of the art of semiconducting management in the US.
  • Russian invasion of Ukraine is unmitigated disaster and Western World unified in imposing sanctions. Seeing that, China is not going to invade Taiwan anytime soon.

  • Ukraine is a good reason why we need this (Score:5, Interesting)

    by DeplorableCodeMonkey ( 4828467 ) on Wednesday March 02, 2022 @09:21AM (#62318389)

    If our "leadership" actually connected the dots, they'd be fast-tracking this. They'd be telling ASML "get that fab hardware built like yesterday."

    Here's why. You know where Russia had a bunch of ships as of a few weeks ago? The Indian Ocean working with Iran.

    China is aggressively stepping up its hostility toward Taiwan. Apparently, we've moved a huge percentage of our pacific fleet to waters near Japan.

    Yet these jokers cannot connect the dots on what Russia/Iran/China may well be planning: they're using Russia to draw us into a war in Europe while Russia and Iran flip the economic table on Europe by closing the Persian Gulf to Arab oil shippers (thus wrecking the European economy in retaliation) and China will take Taiwan and impose its own sanctions on the West saying "no more electronics for you until you yield."

    • Re: (Score:2)

      by sinij ( 911942 )

      Yet these jokers cannot connect the dots on what Russia/Iran/China may well be planning: they're using Russia to draw us into a war in Europe while Russia and Iran flip the economic table on Europe by closing the Persian Gulf to Arab oil shippers (thus wrecking the European economy in retaliation) and China will take Taiwan and impose its own sanctions on the West saying "no more electronics for you until you yield."

      How do you think Russia and Iran would block Persian Gulf? Sure, they could try, but do you think there is any chance that combined navies of all NATO countries would not succeed in clearing them out?

      Regarding China, while they clearly want Taiwan, imposing sanctions on NATO countries would be equally, if not more, devastating to China. Do you think China would risk crashing their economy, requiring them to abandon their initiatives in Africa and South America, over Taiwan?

      I think your theories are a doo

      • How do you think Russia and Iran would block Persian Gulf? Sure, they could try, but do you think there is any chance that combined navies of all NATO countries would not succeed in clearing them out?

        For a few reasons:

        1) NATO is nowhere near as powerful as it was 30 years ago. This goes for the USN too; it doesn't even have 300 ships anymore last I checked.
        2) The NATO forces have to pass through the Strait of Hormuz which is so close to Iranian territory that the Iranian Army and Revolutionary Guard **groun

        • Re: (Score:2)

          by sinij ( 911942 )
          Seeing how "modern" Russian armored tech is getting easily destroyed by NATO's hand-down drones and shoulder-fired rockets despite having reactive armor (suggesting that supposed Russian innovation was all propaganda) it is equally likely that Russian Navy is similarly 40+ years behind The West. As such, actual numbers don't really matter, as they are drastically outclassed in capabilities. They might as well be attempting to use coal-powered dreadnoughts.

    • If our "leadership" actually connected the dots, they'd be fast-tracking this. They'd be telling ASML "get that fab hardware built like yesterday."

      Here's why. You know where Russia had a bunch of ships as of a few weeks ago? The Indian Ocean working with Iran.

      China is aggressively stepping up its hostility toward Taiwan. Apparently, we've moved a huge percentage of our pacific fleet to waters near Japan.

      Yet these jokers cannot connect the dots on what Russia/Iran/China may well be planning: they're using Russia to draw us into a war in Europe while Russia and Iran flip the economic table on Europe by closing the Persian Gulf to Arab oil shippers (thus wrecking the European economy in retaliation) and China will take Taiwan and impose its own sanctions on the West saying "no more electronics for you until you yield."

      Actually, from a geopolitical standpoint, now is the time to get Iran back into the broader world and selling oil without sanctions.

    • China's work in Africa indicates they've decided it is easier to buy the world than conquer it but I guess we'll see.

    • Re: (Score:2)

      by e3m4n ( 947977 )
      I called that first of January. Russia/China were playing a game of chess with aggressions building in both areas. Im not entirely sure Iran will continue to back Russia now that Putin seems to be on a quest to push the Russian Orthodox Churches into Ukraine. This schizophrenic mission from god he believes he is on will eventually target the jews and muslim living in Ukraine. I am unsure Iran will continue to work with Russia once it turns on the muslim populations. China, on the other hand, seems to be in

  • Isn't that what stock is for? (Score:3)

    by ThomasBHardy ( 827616 ) on Wednesday March 02, 2022 @09:27AM (#62318419)

    Maybe I'm an overly simplified kick, but isn't this exactly what stock can do for intel?

    They spent years buying back stock.
    Now they can choose to sell 20B of it to help fund the gap instead of asking for taxpayers to pay for it.

    • Re: (Score:2)

      by Junta ( 36770 )

      Not sure I'm crazy about the concept, but assuming things were that simple, Intel could:
      -Sell shares and raise 20 billion to... do whatever they want wherever they want
      -Get funding from government with conditions mandating that the capacity be kept on American soil

      Of course, it's not either/or, as it stands every viable candidate would be offering them incentives, basically the governments are in competition to get Intel to build on their respective territory. So the difference is whether or not the govern

      • Re: (Score:2)

        by dgatwood ( 11270 )

        Not sure I'm crazy about the concept, but assuming things were that simple, Intel could: -Sell shares and raise 20 billion to... do whatever they want wherever they want -Get funding from government with conditions mandating that the capacity be kept on American soil

        The first problem I see with this strategy occurs when they have to do a process upgrade in the future. What prevents them from deciding that it is cheaper to build their new process overseas? Sure, they might keep the existing chip manufacturing lines available in the U.S., but over time, that will be used by progressively lower end fabless chipmakers, until nobody is still using it, at which point the only option would be be to spawn it off into a separate company that eventually declares bankruptcy, an

    • Why devalue their personal bonus when the taxpayers will pay for it?

      The top of an organization is often motivated with stock connected incentives. Means they'll help investors since they're one of them.

  • Because "Team Red" can NEVER be seen to do something that "Team Blue" proposes, there will be no new chip manufacturing in the United States.

    Transpose team names and the sentence is just as true as before.

  • Let's not be hasty. When Biden called for this, his own party stood and applauded while the "conservative" half of the chamber sat on their hands as if at a funeral.

    Thus, the "conservative" course of action is to buy the semiconductors required to defend our country from an increasingly combative China, from Taiwan.

    EDIT: The Chinese government has strongly recommended I update my post to reflect inaccuracies in my understanding of geography. The post should read as follows:

    Thus, the "conservative" course o

    • Hopefully with the Russian money cut off their influence in our politics will start to dry up

  • I thought handing out massive freebies to wealthy corporations was the Republican strategy. I don't really feel that the Democrats need to copy it.

    Of course, Obama got to take the blame for passing Dubya's ACA plan, which isn't so much a healthcare plan as a gift to insurance companies. Both parties get to grift the public for the benefit of the rich.

    • I still find it amazing you blame the republican's for a bill none of them voted for.

      The democrats could have revamped it into the perfect thing you think they would have made and it wouldn't have changed one republican vote.

  • Intel had over $4 billion in profits in the fourth quarter. If you assume that is roughly what the other three quarters had, that's over $11 billion in profits in one year. When taking into consideration any money they used to buy back stock to prop up the price, they have more than enough money to build their own fabs with taxpayer money.

    The same goes for all these other welfare queens. If you have money to buy back stock, you have money to build your factories without outside assistance.

    If these compan

    • Does intel even make the kind of processors that are used in automobiles? Why do people keep grousing about intel?

      • Does intel even make the kind of processors that are used in automobiles? Why do people keep grousing about intel?

        Intel makes chips for computers and other electronics.

        Further, from the article itself:

        Intel plans to spend $100 billion to build the Ohio "megafab" over the next decade, with an eventual total of eight fabs, but the speed of that investment will depend on the US subsidy, Gelsinger has said.

        This is why people grouse about Intel. They have the money, but they're waiting for their welfare checks to arrive.

    • BINGO! One of the few smart posts here.

  • What happens if the one company (as I, an outsider understands it) won't sell the magic equipment to do cutting edge photolithography?

    What happens if Intel won't make your chips, like they won't for NVIDIA (and I assume AMD)? Any benefit from the government should come with requirements to service ALL American companies equally, if not all possible customers. Let's return to true, fair competition. If you can't do your job well, then maybe you shouldn't be doing it.

    Cutting edge chips aren't the only ingr

    • Re: (Score:2)

      by dgatwood ( 11270 )

      What happens if the one company (as I, an outsider understands it) won't sell the magic equipment to do cutting edge photolithography?

      What happens if Intel won't make your chips, like they won't for NVIDIA (and I assume AMD)? Any benefit from the government should come with requirements to service ALL American companies equally, if not all possible customers. Let's return to true, fair competition. If you can't do your job well, then maybe you shouldn't be doing it.

      The only way to get real competition is to separate the means of production from the design. TSMC doesn't design chips. They build them. They do one thing, and they do it well — so well that they have only one real competitor at this point (Samsung), down from at least real three competitors just a few years ago. And now their fab technology is about to be used by Intel.

      We need competition at the fab R&D level, which we don't have much of at all, and at the fab manufacturing level. But there'

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