Intel and AMD Ask for Government Incentives While Apple Supplier TSMC Expands to Meet Unprecedented Demand

A group of U.S. chip companies, including Intel, Qualcomm, Micron, and AMD, have today sent a letter to President Joe Biden to request "funding for incentives," while Apple supplier TSMC is undertaking a considerable expansion as chip demand outstrips supply (via Reuters).

tsmc semiconductor chip inspection 678x452

The letter to the President asked for "substantial funding for incentives for semiconductor manufacturing" to be included in his economic recovery and infrastructure plans. The letter from the U.S. firms noted that the U.S. share of semiconductor manufacturing has dropped from 37 percent in 1990 to 12 percent today.

This is largely because the governments of our global competitors offer significant incentives and subsidies to attract new semiconductor manufacturing facilities, while the U.S. does not.

Working with Congress, your administration now has a historic opportunity to fund these initiatives to make them a reality. We believe bold action is needed to address the challenges we face. The costs of inaction are high.

Intel, in particular, has suffered from a myriad of problems. With major client Apple dropping Intel for its own custom silicon, and Microsoft expected to follow suit in the near future, Intel has struggled to deliver technological innovations. This is after the company has repeatedly reported delays with its latest processors, while its main competitor, AMD, has proceeded to capture valuable market share. After a major investor pushed Intel to shake up its entire business model, the company is hoping that new CEO Pat Gelsinger will help it to find its way.

While subsidies for chip manufacturing and semiconductor research have been authorized by Congress, the quantity of funding has yet to be decided. The association of companies hopes to receive significant funding in the form of grants or tax credits to claw back market share.

The formal request comes amid a global shortage of chips, which have hampered the automotive industry and popular games consoles in particular. The majority of the supply of the constrained chips comes from Taiwan and Korea, which have come to dominate the industry in recent years.

EETimes is today reporting that unlike the U.S. firms, TSMC, Apple's main chip supplier, is raising $9 billion from bonds to expand production. The company has approved the establishment of a $186 million subsidiary in Japan to expand research on materials for three-dimensional chips, following unconfirmed reports that TSMC plans to open its first overseas chip-packaging facility in Japan. TSMC also plans to combat U.S. chip makers on home territory this year by opening a new manufacturing facility in the U.S. state of Arizona.

TSMC is currently trying to meet unprecedented demand that exceeds its production capacity as global demand for secure supplies of chips skyrockets, boosting component prices by as much as 15 percent in the past two financial quarters. The chip shortage has not severely affected Apple since TSMC gives it priority over other clients such as Microsoft, Sony, Volkswagen, and Toyota because it holds much larger orders.

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Top Rated Comments

now i see it Avatar
45 months ago
[HEADING=2]Intel and AMD Ask for Government Incentives Because They Don't Know How to Design Competitive Chips[/HEADING]
Score: 30 Votes (Like | Disagree)
jarman92 Avatar
45 months ago

When the way to wealth is to get the govt to give you other peoples money you are crazy not to be at the table. These companies are all making a perfectly rational choice. It’s where we are now (and have been for a long time).
Yup, the amount of corporate welfare in this country is unbelievable. Congress should be utilizing a lot less carrot and a lot more stick—tax the hell out of companies that ship jobs overseas or levy large financial penalties, instead of throwing money at multi-billion-dollar corporations that turn around and outsource anyway.
Score: 15 Votes (Like | Disagree)
MauiPa Avatar
45 months ago
When you can't compete - ask for a handout. Long live free enterprise
Score: 14 Votes (Like | Disagree)
chucker23n1 Avatar
45 months ago

What is the image?
A wafer. https://en.wikipedia.org/wiki/Wafer_(electronics)


I'm under the impression it's a bunch of manufacturered chips,
A few steps before that.


but I'm confused why it seems to be on a copper circle... the chips themselves are all rectangular, are they not? So why are they made as a circle
You take silicon and spin it. Therefore, you end up with a cylinder. Then you slice that into wafers.



Score: 10 Votes (Like | Disagree)
HacKage Avatar
45 months ago

What is the image? I'm under the impression it's a bunch of manufacturered chips, but I'm confused why it seems to be on a copper circle... the chips themselves are all rectangular, are they not? So why are they made as a circle - aren't all the rounded edges a waste of space? Something I think is probably quite wrong...
Google "why are wafers round"
Score: 10 Votes (Like | Disagree)
jimbobb24 Avatar
45 months ago
When the way to wealth is to get the govt to give you other peoples money you are crazy not to be at the table. These companies are all making a perfectly rational choice. It’s where we are now (and have been for a long time).
Score: 9 Votes (Like | Disagree)