Despite the Biden administration’s announcements of significant investments in chip development, it seems that America has yet to achieve stability in the chip manufacturing sector. With the recent delays in the opening dates of many chip factories, industry leaders have started to become quite concerned. Here are the details…
Will America Lag Behind in Chip Production?
TSMC, a company specializing in chip design, announced in 2022 that it would start construction on a $40 billion chip factory in Arizona, USA. However, TSMC has postponed the start date of production to 2025. The reason cited for this decision is the lack of sufficient knowledge among the local workforce about building chip factories. However, it is said that the lack of adequate incentives from the American government and the upcoming general elections have also significantly influenced this decision.
Another chip designer, Intel, has also slowed down its production processes in its factories due to its involvement in new R&D activities. It is well known that producing chips used in artificial intelligence systems is a complex and costly process. Companies are demanding that a portion of these costs be covered by the government of the country where they operate.
There have been new developments regarding the TSMC Japan factory. The firm announced that the factory will be completed by the end of 2027.
Although the American government has prepared a massive $39 billion incentive package for chip manufacturers in the country to cover some of these massive costs, manufacturers are skeptical about how long this support will last. The uncertainty about whether the Biden administration will succeed in the upcoming elections is also cited as another factor contributing to the unrest in the industry.
The impact of all this chaos on chip prices worldwide has already become a topic of interest in the tech world. However, it was recently announced by the American government that chip incentives have entered an advanced stage. The provision of a $1.5 billion incentive to GlobalFoundries has reignited hopes.
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