July 19, 2022

Some stakeholders in the chip industry have expressed dissatisfaction with the CHIPS Act, which they say would benefit chip manufacturers and do little to help chip designers.

Companies such as Intel, Texas Instruments, and Micron Technology design and produce their own chips. As a result, these companies will benefit from the CHIPS Act subsidies of US$52 billion to build factories. They would also benefit from another measure, called the FABS Act, which provides a tax credit for investments to buy tools for use in their factories.

Chip developers such as AMD, Qualcomm, and Nvidia will not directly benefit from subsidies to build factories or tax support for tools because they do not make their chips.

Chip designers however, support a separate version of the FABS Act introduced in the U.S. House of Representatives, which includes both the manufacturing tax credit and a tax credit for chip design activities that would directly benefit them.

The version that chip designers have been clamoring for is also widely accepted in the chip industry, with the Semiconductor Industry Association, which represents U.S. chip companies, urging lawmakers to pass this particular version of the bill.

“We’re encouraged that the legislation is progressing, and we continue to support enactment of US$52 billion in CHIPS Act investments and a FABS Act investment tax credit for both manufacturing and design,” the association said in a statement on Friday.

The sources for this piece include an article in Reuters.