Hopper58 schreef op 13 november 2024 17:01:
The Dash for Chips Act Cash Before Trump Takes Office
By
Bill Alpert
Last Updated: Nov. 13, 2024 at 9:15?a.m. ET
First Published: Nov. 13, 2024 at 7:39?a.m. ET
On the campaign trail, Donald Trump had harsh words for the Chips and Science Act, the $50 billion legislation that Joe Biden signed in 2022 to return semiconductor manufacturing to American shores. Tariffs could do that without spending a dime, Trump told podcaster Joe Rogan.
Congress has thus far funded $39 billion under the Chips Act. Of that, $36 billion has been awarded by the Commerce Dept. to Intel, MicronTechnology, Taiwan Semiconductor Manufacturing, Texas Instruments, and others.
But no money has been disbursed.
So with Trump’s victory, the chip industry, chambers of commerce, and Wall Street are anxious about the money.
Tuesday afternoon, business groups in Ohio, New York, Oregon, and New Mexico sent Biden a letter imploring him to distribute the funds in the next 30 days.
“The Chips Act passed over two years ago, and these funds are long overdue to reach domestic chip makers across the United States,” said Ohio Chamber of Commerce CEO Steve Stivers, in an accompanying press release.
“It’s time to wrap it up,” Stivers told Barron’s. “We just want to see the money start to flow.”
Here’s good news for an anxious chip industry. Late Tuesday, a person familiar with Biden administration plans told Barron’s that the Commerce Dept. will award all of the Congressionally funded $39 billion before the end of Biden’s term.
The $36 billion in announced Chips Act awards were just letters-of-intent. Next come long-form term sheets. Finally, both sides negotiate and sign legally binding agreements. Actual disbursement will be pegged to construction milestones over the coming years.
There’s a lot riding on these awards. Intel shares have lost over half their value this year, as the company fell behind Nvidia and Advanced Micro Devices in artificial-intelligence chips.
Meanwhile, Intel has invested $30 billion toward projects in Ohio, Arizona, Oregon, and New Mexico designed to keep it at chipmaking’s leading edge. Two planned Intel chip foundries near Columbus represent the largest private-sector investment in Ohio history. Along with 7,000 jobs in their construction, the Ohio plants would bring 3,000 permanent workers. No wonder 10 Ohio trade groups joined its Chamber of Commerce in pressuring the White House.
The chamber of commerce pleas to the White House take place against a negotiating backdrop. Intel is hammering out final terms with the Commerce Department for up to $20 billion in Chips Act grants and loans.
“We continue to work with the Biden administration to finalize our award,” Intel told Barron’s Tuesday night. “The Commerce Department has publicly said that it wants to complete the process by the end of the year.”
“These are tough negotiations,” said a government source familiar with the Chips Act. “They’re not designed to be a rubber stamp.”
Despite Trump’s campaign rhetoric, it’s likely that Chips Act spending will continue under the next administration. While the chip industry presses Biden’s Commerce Department for cash commitments before the changeover, the companies finding Republican champions.
“The idea behind the Chips and Science Act began in the first Trump administration and maintains strong bipartisan support,” said Intel. “We look forward to working with the Trump administration.”
The Chips Act has had plenty of bipartisan fans. Projects planned under the program are sited in Ohio, Arizona, and other places that went for Trump, in last week’s election. Ohio’s Republican governor Mike DeWine has cheered the Chip Act spending plans, as has the state’s newly elected Republican senator Bernie Moreno. Vice president-elect J.D. Vance has one of his U.S. senate offices in Columbus, near Intel’s planned foundries.
Only one Chips Act project has completed a binding agreement for funds. Polar Semiconductor will get $123 million as it builds a $525 million plant in Bloomington, Minn.
Commerce awarded $1.5 billion to Malta, N.Y.-based GlobalFoundries. Its chief executive Thomas Caulfield told CNBC that he was comfortable that the Chips Act’s bipartisan support meant that its funding would continue under Trump.
“We continue to work with the Chips office to finalize our agreement,” a GlobalFoundries spokesperson told Barron’s.
“The Chips and Science Act, a key part of the Biden-Harris administration’s Investing in America agenda, is already making a difference in countless communities across the country,” White House spokeswoman Robyn Patterson told Barron’s in a statement. “The administration will continue to implement this bipartisan law with speed and efficiency until the end of the term.”
In response to Barron’s questions, the Commerce Dept. issued this statement: “The Chips and Science Act passed with overwhelming bipartisan support and it has unlocked more than $400 billion in total investments, is expected to create more than 125,000 jobs.”
“We will have more announcements in the coming weeks,” the agency’s statement concluded.
www.marketwatch.com/articles/trump-bi...