The CEOs of Intel and Micron will testify in support of U.S. semiconductor subsidies.
Intel (INTC.O) and Micron (MU.O) CEOs will testify before the Senate Commerce Committee on Wednesday in support of government subsidies to stimulate semiconductor production.
According to previously unreported testimony seen by Reuters, Intel Chief Executive Officer Pat Gelsinger will tell the committee that “there is an urgent need for the federal government to incentivize more private sector investment in the United States to enable a resilient and innovative semiconductor ecosystem.”
In his prepared statement, Micron Chief Executive Officer Sanjay Mehrotra claims that granting $52 billion for chips “would kick start investment in workforce development, R&D, innovation, and manufacturing expansion in the near term.”
A continuous chip scarcity has hampered manufacturing in the automotive and electronics industries, prompting some companies to reduce output.
Both the Senate and the House have enacted versions of the CHIPS Act, which approves $52 billion in chip subsidies but disagree on key elements aimed at increasing US competitiveness with China.
On Tuesday, Commerce Secretary Gina Raimondo visited with senators and encouraged them to act quickly on chips.
“The situation in America right now is critical,” Raimondo remarked. “We need to reduce our reliance on other nations for chips, especially Taiwan, and the best way to achieve that is to produce more chips in America.”
Mehrotra will also urge Congress to pass “the refundable investment tax credit… to create a long-term incentive that would re-energize domestic semiconductor manufacturing.”
Micron has revealed intentions to invest more than $150 billion in leading-edge memory manufacturing and R&D over the next decade, and it is considering establishing new fabs in the United States.
According to Mehrotra’s testimony, building those new fabs in the US “requires close collaboration with federal and state policy to assure the economic feasibility of our operations,” and “we estimate that a large amount of federal assistance will be necessary to make a mega-fab viable.”
Intel has announced intentions to invest $20 billion in Ohio to create two new mega fabs, with the capacity to expand to eight.
and $100 billion “assuming CHIPS Act support,” according to Gelsinger’s testimony.
New U.S. fabs “will rely on semiconductor production equipment and materials,” according to Lam Research Chief Executive Officer Tim Archer, who oversees the semiconductor manufacturing equipment company.
According to Archer, a grant program from the Commerce Department should be able to “offer incentives across the full value chain” and promote an “all-of-ecosystem approach.”
Preston Feight, CEO of PACCAR (PCAR.O), will testify before the committee that the transportation manufacturing business has been compelled to pay brokers “20 to 30 times” the contract costs to obtain chips at times.
“Companies requesting CHIPS Act financing should be required to address the needs of American key enterprises, including truck manufacturers before they are permitted to receive U.S. taxpayer cash,” Feight suggested in his comments.
Source-Reuters