President Joe Biden’s ambitious plan for boosting domestic chip manufacturing is already hitting serious roadblocks, The New York Times reported Monday.
Biden signed the CHIPS Act in August 2022, which includes $39 billion in direct funding for chip manufacturers to increase production in the United States. Taiwan Semiconductor Manufacturing Company (TSMC), Intel and Microchip Technology are all encountering expansion challenges and modifying their schedules in the wake of sales sliding across various chip categories and absence of funds received from the Biden administration, according to the NYT. (RELATED: Biden’s Sanctions Fail To Keep Sensitive Chip Technology Out Of China’s Hands)
Welcome to Fab 9, Intel’s newest factory in New Mexico.
It will manufacture Intel’s 3D advanced packaging technologies like Foveros, which offers a faster, cost-efficient path to 1 trillion transistors on a chip and extending Moore’s Law beyond 2030. https://t.co/1Xh7Tn92po pic.twitter.com/x18Hi5OKP0
— Intel News (@intelnews) January 24, 2024
Building chip factories is extremely expensive, complicated and time-consuming, requiring thousands of construction workers and billions of dollars of equipment, according to the NYT.
TSMC delayed its first Arizona factory because of worker issues as it originally slated its completion for 2024, but now will not be operational until 2025 at the earliest. Its second factory’s schedule of manufacturing chips has been delayed until 2027 or 2028 instead of 2026 because of Biden administration funding uncertainty, according to the NYT.
Intel is spending $20 billion on two Ohio factories but they are now slated for completion in late 2026 instead of 2025, as originally anticipated, because of the current chip market, The Wall Street Journal reported.
Another major player in the chip space, Microchip Technology, has pushed back its growth plans, including purchasing machinery, until the semiconductor market stabilizes, according to the NYT.
“Nothing has failed yet,” Emily Kilcrease, senior fellow and the director of the energy, economics and security program at the Center for a New American Security, told the NYT. “But we’re going to have to see some progress and those factories actually coming online in the next few years for the program to be considered a success.”
The Biden administration is starting to dole out significant funds in an effort to bolster America’s semiconductor sector and decrease reliance on Chinese-made chips, according to the NYT. The Commerce Department is tasked with this under the CHIPS Act.
“We will start to give out the money later this year,” Secretary of Commerce Gina Raimondo asserted in 2023, according to CNBC. “We’re pushing the team to go fast, but even more important, to get it right.”
The Commerce Department has only issued three grants thus far, according to the NYT. The investments will likely be a key part of Biden’s 2024 campaign.
The White House, Commerce Department, TSMC, Intel and Microchip did not immediately respond to the Daily Caller News Foundation’s request for comment.
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