Tag: chips act

EU’s Chips Act Said to Get Approval on April 18, Likely to Cut EU’s Reliance on US and Asian Semiconductors

The European Union’s EUR 43 billion (nearly Rs. 3,84,120 crore) plan to boost its semiconductor industry and catch up with the United States and Asia is likely to get the green light from EU countries and lawmakers on April 18, people with direct knowledge of the matter said on Wednesday.

The European Commission announced the Chips Act last year in a bid to cut EU reliance on US and Asian semiconductors following global supply chain problems that hurt European businesses from carmakers to manufacturers.

The proposed legislation, which aims to double the bloc’s share of global chip output to 20 percent over the next decade, came after the United States announced its CHIPS for America Act to compete with Chinese technology.

EU countries and lawmakers will meet at the European Parliament’s monthly session in Strasbourg on April 18 to negotiate details of funding for the Act and will likely clinch a deal, the people said.

Discussions have to date focused on a EUR-400-million shortfall, but the EU executive has managed to come up with the bulk of the funds, they said.

While the Commission had originally proposed funding only cutting-edge chip plants, EU governments and lawmakers have expanded the scope to cover the whole value chain, including older chips and research and design facilities, the people said.

Lawmakers had singled out Belgium-based IMEC, a world-leading innovation hub in nanoelectronics and digital technologies and with an ecosystem of more than 600 major industry players, as a key reason for ploughing more funds into EU R&D, they said.

Providing funding to the entire value chain also addresses complaints from the smaller EU countries about being left out after Intel, attracted by the Chips Act, picked Germany for its new mega chip manufacturing complex.

Franco-Italian company STMicroelectronics has also teamed up with GlobalFoundries to build a EUR 6.7 billion (nearly Rs. 59,860 crore) chip factory in France, drawing on funding from the government.

© Thomson Reuters 2023

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Micron Plans to Build a $100 Billion Semiconductor Plant in New York

Micron announced on Tuesday it will invest up to $100 billion (nearly Rs. 8,14,500) to build semiconductors in New York state, capitalising on the US policies to boost domestic manufacturing of key goods.

The chip giant, which is based in the western state of Idaho, said it plans to begin construction in 2024 on a project expected to be executed over two decades.

New York state is providing $5.5 billion (nearly Rs. 44, 800 crore) in state incentives over the life of the build-out and the project also expects to utilise tax credits under the Chips Act signed into law by President Biden in August, said a Micron news release.

At an event in Syracuse to announce the investment, New York Governor Kathy Hochul likened the drive to a “fourth industrial revolution” and alluded to an improvement in fortunes for a upstate New York region that had lost thousands of manufacturing jobs in earlier decades.

There is “hope of a better tomorrow,” Hochul said.

Micron, describing the plant as the “largest semiconductor fabrication facility in the history of the United States,” said the venture would create 50,000 jobs in the state, including 9,000 at Micron.

Biden touted the investment as reflecting the importance of the Chips and Science Act, which included around $52 billion (nearly Rs. 4,23,300 crore) to promote production of microchips, the tiny but powerful and relatively hard-to-make components at the heart of almost every modern piece of machinery.

“To those who doubted that America could dominate the industries of the future, I say this -– you should never bet against the American people,” Biden said in a news release. “Today is another win for America.”
Shortages of semiconductors have been a drag on the global economy during the pandemic, crimping production of automobiles, personal electronics and other goods.

Micron Chief Executive Sanya Mehrota said the investment “will deliver benefits beyond the semiconductor industry by strengthening the US technology leadership as well as economic and national security, driving American innovation and competitiveness for decades to come.”

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US President Joe Biden Signs Order for Implementation of CHIPS Act, Forms Council for Policy Development

US President Joe Biden signed an order to implement the 2022 CHIPS Act on Thursday. The executive order will ensure subsidy for manufacturing semiconductor chips in the US. The US government’s implementation plan worth $52.7 billion (nearly Rs. 4,21,000 crore) aims at encouraging chip manufacturing and research in the country. The bill is expected to boost the US’s competitive efforts against China’s science and technological developments.

In an official statement by the White House, President Biden signed an executive order to implement the $52.7 billion CHIPS Act to boost chip manufacturing in the US. The act will provide “incentives for semiconductor research, development, and manufacturing.”

The development come days after President Biden signed the CHIPS Act earlier this month. The law is expected to help in solving the chip shortage that has affected several industries including automobiles, home appliances as well as electronic and gaming devices.

Biden’s order has also formed a 16-member interagency CHIPS implementation council, which will include the secretaries of Defense, State, Commerce, Treasury, Labor and Energy. However, there is no information yet on the timeline when the US government will start providing semiconductor chips funding.

Meanwhile, China has condemned the US CHIPS Act. According to Foreign Ministry spokesperson, Wang Wenbin, the measure will “disrupt international trade and distort global semiconductor supply chains. China firmly opposes that.”

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China Claims US CHIPS And Science Act Will Disrupt International Trade, Distort Global Semiconductor Supply Chains

China on Wednesday criticized a US law to encourage processor chip production in the United States and reduce reliance on Asian suppliers as a threat to trade and an attack on Chinese business. The law signed this week by President Joe Biden promises $52 billion (roughly Rs. 4,11,300 crore) in grants and other aid to investors in US chip factories. It responds in part to warnings that supplies might be disrupted if China attacks Taiwan, which produces up to 90 percent of high-end chips. China’s ruling Communist Party claims the self-ruled island as part of its territory.

The measure will “disrupt international trade and distort global semiconductor supply chains,” said a Foreign Ministry spokesperson, Wang Wenbin. “China firmly opposes that.”

Parts of the law “restrict companies’ normal investment and economic and trade activities in China,” Wang said, without giving details.

Disruption in chip supplies following the coronavirus pandemic hampered production of goods from smartphones to autos and highlighted the world’s reliance on Taiwanese chips and Chinese factories that assemble most electronic devices.

Fears of disruption have been heightened by Chinese threats to attack Taiwan, which split with the mainland in 1949 after a civil war.

Beijing launched military drills around the island last week in retaliation for a visit by Speaker Nancy Pelosi of the US House of Representatives. China believes visits by American officials to Taiwan might encourage its leaders to make its de facto independence permanent, a step the mainland says would lead to war.

The “CHIPS and Science Act” calls for research spending that would total about $200 billion (roughly Rs. 15,81,900 crore) over 10 years, according to the Congressional Budget Office.

The Communist Party has spent tens of billions of dollars developing China’s own chip production industry. Its factories make low-end chips for autos and other products but cannot supply high-end smartphones and other devices.

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