The US Senate, by a vote of 64-32, approved a closing motion for the CHIPS Act on Tuesday, ending debate on the bill and paving the way for the Senate's expected passage this week of €52 billion in funding to help semiconductor manufacturers. looking to make products in the United States.
The bill, which still needs to be approved by the US House of Representatives and President Biden to become law, would also provide a 25% investment tax credit.
While €2 billion of direct assistance funding is already earmarked for legacy programs, particularly technologies that the Department of Defense wants to produce in the United States, the remaining €50 billion is generally available for additional domestic silicon manufacturing development. in the country.
The big winners, if the CHIPS Act is officially passed, will be companies like Intel, which already have chip manufacturing facilities in the United States or plan to build one, but other chip companies, especially those that play a leading role in designing chips. but they don't make products themselves, they warn the bill doesn't go far enough to help the US silicon industry.
Lawmakers are also urged to help chip designers
The chief executive of wireless chip design company EdgeQ, Vinay Ravuri, said in a statement that the United States risks losing its edge in innovation by not providing funding to designers and other nonfactory silicon companies.
"Fleas fixes a problem of scale. But it's not about ingenuity," he said. "To stay relevant, we need to invest in cutting-edge companies, especially those that are pushing to disrupt and push industry to new frontiers, like 5G and AI".
Gartner Research vice president and analyst Gaurav Gupta said EdgeQ is far from the only company upset with the bill's focus on silicon industry manufacturing.
“If you talk to people in the industry, you will understand that it will not benefit everyone equally,” he said.
Still, Gupta said, the CHIPS Act is a game changer for US chipmaking, making it much more competitive with overseas semiconductor manufacturing, which typically has much lower production costs.
“It gives OEMs and non-factory companies the ability to buy devices here,” he said. "And the reason for this is that these companies will not come here unless they are motivated by CHIPS, because obviously there is a cost gap between running a factory in Asia and running a factory here."
Chip revenue expected to decline
The likely passage of the CHIPS Act comes at a good time for the semiconductor industry as a whole, as new figures released today by Gartner show that semiconductor revenue growth will slow considerably over the next 18 months. Global revenue is expected to increase 7% during 2022, compared to 26% in 2021, and decrease 2,5% in 2023.
The practice's vice president, Richard Gordon, said this could be good news for clients as prices could start to fall and the time between purchase and delivery is shrinking.
"The semiconductor market is entering an industry down cycle, which is nothing new and has happened many times before," he said in a statement accompanying the results. “While the consumer space will slow down, data center semiconductor market revenue will remain resilient for longer (20% growth in 2022) due to continued investment in cloud infrastructure.”
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