In an unprecedented move, the U.S. government has decided to grant a massive US$19.5 billion subsidy to its domestic semiconductor company, Intel. This amount is nearly double the combined expected subsidies for Samsung Electronics, which is anticipated to receive $6 billion, and Taiwan’s TSMC, expected to get $5 billion.
According to industry sources and foreign media reports on March 21, the U.S. administration announced a total support of US$19.5 billion for Intel, which includes direct subsidies of US$8.5 billion and loans of up to US$11 billion.
President Joe Biden, during his visit to the Intel campus in Arizona, expressed his pleasure in announcing “the largest semiconductor investment in American history,” stating that it will transform the semiconductor industry and create an entirely new ecosystem.
This announcement marks the fourth official disclosure under the Semiconductor Support Act passed in 2022, making it the largest in terms of funding. Prior to Intel, the confirmed recipients of semiconductor subsidies were U.S. companies GlobalFoundries and Microchip Technology, and BAE Systems of the U.K., which manufactures semiconductors for military fighter jets.
The industry views this move as an overt push by the U.S. government to prioritize Intel and bolster the domestic semiconductor sector. Initially, it was speculated that Intel might receive around US$10 billion, but the final amount significantly exceeded those estimates.
Leveraging the substantial government subsidy, Intel plans to invest US$100 billion across the United States over the next five years.
On the other hand, Samsung Electronics, which is rumored to receive a US$6 billion subsidy, faces the dual challenge of increased investment pressure and competition with Intel, which is receiving full-fledged support from the U.S. government.
Samsung Electronics is currently constructing a semiconductor plant in Taylor, Texas, with an investment of US$17 billion. Previously, Samsung had publicly disclosed a major investment project in the U.S. worth US$192.1 billion over a period of more than 20 years.
The U.S. government is expected to announce subsidies for Samsung Electronics and TSMC soon.