According to reports, sources familiar with the matter said today that several major U.S. semiconductor companies are considering whether to oppose the “upcoming Senate vote on the Chip Act” to raise objections, because the bill may only benefit a few chip makers such as Intel and Texas Instruments.
U.S. Senate Majority Leader Chuck Schumer (D-N.Y.) has told lawmakers that a vote on the Chip Act could be held as early as Tuesday local time. The bill aims to strengthen the construction of U.S.-based chip plants to enhance market competitiveness, including specific measures of $ 52 billion in subsidies and investment tax credits.
Currently, the bill has largely received bipartisan support, but is divided within the chip industry. Some semiconductor companies are concerned that the final wording of the legislation could disproportionately support chipmakers such as Intel, with minimal support for chip designers such as AMD, Qualcomm and Nvidia (Nvidia).
Companies such as Intel, Texas Instruments (Texas Instruments) and Micron Technology (Micron Technology), who both design chips and manufacture their own chips. Such companies will benefit from the Chip Act’s $52 billion in subsidies for building factories. In addition, they will also benefit from another bill, namely the “Promoting American Made Semiconductors” (FABS) Act, which provides a 25% tax credit for the purchase of tools for semiconductor factories.
In contrast, AMD, Qualcomm and Nvidia design their own chips, but seek partners to build them, and therefore would not benefit directly from subsidies to build fabs (the Chip Act) or tax credits for tooling (the FABS Act).
For this reason, they support an alternative version of the FABS Act introduced in the U.S. House of Representatives, which contains both manufacturing tax credits and tax credits for chip design activities that would directly benefit them. The FABS Act also has the support of the Semiconductor Institute of America (SIA).
An SIA statement said, “We are encouraged that the legislation is moving forward and we continue to support the enactment of the $52 billion Chip Act investment, as well as the FABS Act investment tax credits for manufacturing and design.”
The current Senate legislation, on the other hand, does not include a chip design tax credit. This has prompted some U.S. chip companies, which asked to remain anonymous, to consider opposing the bill in the Senate, two people familiar with the matter said. If the final wording of the law does not target the chip design tax credit, they will protest.
A representative of one of the companies opposing the bill said: “Intel could get $20 billion in subsidies through the Chip Act, plus $5 billion or $10 billion under the FABS Act, and that’s $30 billion going to your direct competitors, and you don’t get a penny, and that’s a problem. “
And a source at another semiconductor company said, “It’s only going to benefit a few companies.”
In response, Nvidia declined to comment, while AMD, Qualcomm and Intel have yet to comment.