Biden Reportedly Plans Billion-dollar Chip Initiative Ahead Of Elections: Eyes On Intel, Taiwan Semiconductor And More

Ahead of the elections, the Biden administration is reportedly set to announce subsidies worth billions of dollars for major semiconductor companies, including Intel INTC and Taiwan Semiconductor Manufacturing Co. TSM under the $53 billion Chips Act. 

The law aims to reshore advanced microchip production to the U.S., countering China’s growing chip industry, reported The Wall Street Journal.

The slow implementation of the bipartisan 2022 Chips Act, frustrated by permitting, negotiations, and worker shortages, has led to only two small grants being awarded out of 170 applications, the report read. 

However, industry executives anticipate announcements for larger sums, in the billions, to jumpstart the production of advanced semiconductors powering smartphones, AI and weapons systems.

The expected announcements, likely before Biden’s State of the Union address on March 7, aim to showcase economic achievements amid the upcoming election season.

Key beneficiaries may include Intel and TSMC, with projects underway in battleground states like Arizona, Ohio and New Mexico, The Wall Street Journal added.

The Chips Act, featuring $39 billion in manufacturing grants and other financial support, faces challenges in timely implementation. Lawmakers and industry officials have expressd concerns about permitting delays, potentially extending the timeline for taxpayer-subsidized factories to produce American-made chips.

The delays may impact Biden’s re-election push, as voters hold a skeptical view of his economic stewardship. Although popular individually, the collective impact of economic policies like the Chips Act faces criticism, with delays and workforce requirements complicating funding negotiations.

Despite concerns, administration officials have highlighted private sector investments exceeding $200 billion spurred by the Chips Act.

However, hurdles include the National Environmental Policy Act, negotiations complicated by unclear program rules and industry dissatisfaction, the report added.

A shortage of skilled workers adds to the challenges, with the Semiconductor Industry Association estimating a shortfall of 67,000 workers in the industry by 2030. 

As negotiations continue, industry experts have stressed the need for predictability to encourage significant investments and global competitiveness.

Other prominent stocks to monitor in light of this development include Samsung Electronics SSNGY, Micron Technology MU, and Texas Instruments TXN. 

Additionally, keep an eye on related ETFs such as the iShares PHLX Semiconductor ETF (SOXX) and the VanEck Semiconductor ETF SMH.

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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