The Biden government disclosed on Tuesday the conditions for granting $39 billion in subsidies to transform the US semiconductor manufacturing industry, and technology industry sources said some unexpected provisions have reduced the attractiveness of these funds.http://www.ic-bom.com/

Although no chip industry sources said that the company would give up its expansion plan for construction in the United States, they complained about the extensive regulations of the United States Department of Commerce on obtaining funds, ranging from requiring sharing excess profits with the government to providing affordable childcare services for construction workers who build factories.

The issue of profit sharing is one of the most controversial issues. Industry sources say that this measure is surprising and it is currently unclear how it will apply to companies, as each company must negotiate a separate agreement with the US government.

A semiconductor industry source told Reuters: "If this is a precursor for (government officials) seeking more in-depth things during the negotiation stage, then there are some criticisms that it may make things more challenging

Industry insiders say that even some commonly expected regulations - such as prioritizing applicants who agree to stop stock repurchases within five years after receiving funding - may be difficult for some companies. In the turbulent market of the chip industry, which has shifted from shortage to oversupply within two years, stock repurchases can help make investors feel happy.

Another chip industry executive told Reuters, "I believe this will make the company feel heartbroken." He requested anonymity to discuss sensitive issues. How the market will develop is not yet known. This grant will limit their flexibility.http://www.ic-bom.com/

When announcing these regulations on Tuesday, Commerce Minister Gina M. Raimondo stated that these regulations aim to ensure that the money is used properly and in a way that benefits workers.

Throughout our entire work, we are committed to protecting taxpayers‘ money, strengthening the workforce in the United States, and providing a platform for American companies to do what they are best at: innovation, scale, and competition, "she said.

For profitable companies such as TSMC, which has already started construction at a large factory in Arizona, it has not yet stated whether it will apply for US funding. Repurchase and profit sharing terms may prove to be a difficult sell to investors outside the US.

A third chip industry source said, "It is very strange for a foreign company to accept this kind of intervention in its business." TSMC did not immediately respond to a request for comment.http://www.ic-bom.com/

According to the first industry source, for chip companies that have already planned to provide childcare services for their factory workers, providing additional benefits for construction workers who are building new factories is "a bit distracting, but it can be controlled". I‘m worried that some of them may slow down what people are trying to do

A more onerous issue is that building new chip factories in the United States may become more expensive, as the cost in the United States is already higher than in industrial centers such as Taiwan and Singapore.

According to the fifth industry source, although no one expected a "free lunch," the unexpected regulations will force the company to process data from American factories again. But the source added, "I don‘t think we saw anything that would cause us to walk away.http://www.ic-bom.com/

Explanation of the US Chip Act: Not Just About Chips

On Tuesday, the Biden administration announced the rules for the "Chips for America" program, ushering in a new wave of federal funding for the industry. The plan aims to establish semiconductor research and manufacturing capabilities in the United States.

The Ministry of Commerce will disburse $50 billion in the form of direct funding, federal loans, and loan guarantees. This is one of the largest federal government investments in a single industry in decades, highlighting Washington‘s concerns about the growing dependence of the United States on foreign chips.

Considering the huge cost of building highly advanced semiconductor facilities, the funds may be quickly spent, and the competition for funds has always been fierce.

Let‘s take a look at the goals of the Chip and Science Act and how it operates.http://www.ic-bom.com/