US CHIPS Act Stalls On Claims It Unfairly Favors Intel And Others Over AMD And NVIDIA

The US CHIPS Act is aimed at making America more competitive against China when it comes the chip industry. However, several US semiconductor firms are said to be debating on whether or not to oppose the package, due to what some are saying are disproportionate benefits toward manufacturers like Intel and Micron.

According to Senate Majority Leader Chuck Schumer, a vote on the CHIPS Act could come as early as this Tuesday. The bill has been slimmed-down a good bit, in order to make the bill more digestible for some lawmakers. The bill is aimed at making the US more competitive against China, which has seen an increase in the chip industry over the last five years in terms of global sales.

As of right now, the bill includes $52 billion in subsidies and an investment tax credit that will bolster US manufacturing. While the bill has bipartisan support, some Republicans may vote against the measure due to unrelated spending bills attached by Democrats.

Divisions among politicians are nothing new, but there may also be a rift growing within the chip industry itself. Sources said to be familiar with the situation have told Reuters that some are not happy with the final language of the legislation that could provide disproportionate aid to companies such as Intel, while doing little for other companies like AMD, Qualcomm, and NVIDIA.

The issue seems to lie with how the investment tax credit associated with the FABS Act that is in the Senate now would be dispensed among chip designers and makers. A company like Intel, who just broke ground on a new factory in Ohio earlier this year, would benefit from the subsidies, as well as from the investment tax credit to purchase tools for use inside the factories. This is because companies like Intel design and fabricate its own chips.

However, companies who design their own chips, but use others to manufacture them would see little to no benefit from the FABS Act as it is currently being proposed in the Senate. AMD, Qualcomm, and NVIDIA are a few of those companies who rely on partners for fabricating its chips. Those companies would be left out from getting any help through the investment tax credit.

Those companies are in favor of a version of the FABS Act that was introduced in the House of Representatives, and contains language that would also benefit companies that design its own chips, but do not manufacture them as well. The Semiconductor Industry Association, which represents US chip firms, has called on lawmakers to pass this version instead of the one in the Senate currently.

"We're encouraged that the legislation is processing, and we continue to support enactment of $52 billion in CHIPS Act investments and a FABS Act investment tax credit for both manufacturing and design," the association remarked in a statement on Friday.

Top Image Credit: Tobias Dahlberg from Pixabay