- U.S. government's shift of focus from chip funding has landed the chipmakers in a soup, CNBC reports.
- The dillydally will serve as a dealbreaker for Intel Corp (NASDAQ:INTC) and Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM).
- The chipmakers explored or were amid building plants in the U.S., spurred partly by the promise of government incentives worth $52 billion to beat the chip crisis and reduce its dependence on the international chipmakers.
- The pandemic played a significant role in vandalizing the semiconductor supply chain. The crisis got further aggravated as chipmakers focused on smartphones, PCs, and laptops as the world moved online during the pandemic for work, study, and recreation at the cost of the carmakers who had to opt for production cuts.
- The U.S. is currently home to companies that dominate the $550 billion silicon industry when measured by revenue, Bloomberg reports. But Asia accounts for the majority of actual production.
- However, the fate of the CHIPS Act got clouded by lawmakers seeking to resolve differences between two competing versions of the legislation.
- Intel voiced concerns over its $100 billion Ohio plant, where it had committed $20 billion, whose scope and pace of expansion will depend heavily on funding.
- The Biden administration had hailed the factory as an example of the president's efforts to drive manufacturing capacity in the U.S.
- Unfortunately, the U.S. seems indifferent toward chip production ramp-in despite the heightened geopolitical rivalry between China and the U.S. and chip shortages.
