June 23, 2023
In a race to reduce reliance on overseas suppliers, governments around the world are pouring billions of dollars into subsidies to attract chipmakers to build domestic factories.
Intel Corp., which recently announced a combined investment of more than $50 billion in new operations in Poland, Germany, and Israel, is one of the benefactors of this. While Taiwan Semiconductor Manufacturing Co. (TSMC) is in talks with governments about the development of more plants.
Subsidies have also helped chipmakers such as STMicroelectronics NV and GlobalFoundries Inc., with the European Union’s Chips Act paying about 40% of their expenditures. Subsidies have also been invested in by the United States, the European Union, Japan, and India totaling more than $100 billion.
While subsidies assist chipmakers deal with rising costs and contribute to the restructuring of global manufacturing, governments regard them as investments in job creation, infrastructure, and protecting the semiconductor supply chain, which affects other industries.
Some experts fear that the subsidies may backfire, increasing expenses and preventing self-sufficiency. Others, however, argue that the expenditure is necessary to ensure that countries have a reliable supply of semiconductors.
The sources for this piece include an article in DataCenterKnowledge.
