Semiconductor Industry Kicks off Lobbying Efforts, Seeks Billions

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As trade tensions continue with China, the American semiconductor industry is headed to Washington to push for $37 billion in federal funding to keep the industry competitive against China.

According to the Wall Street Journal, the SIA is asking for $5 billion in matched funding for a new semiconductor fab that would be operated in conjunction with a firm in the private sector — likely Intel NASDAQ:INTC. Intel CEO Bob Swan proposed in April that the company build a facility to work with the Pentagon on semiconductors for the defense sector. The SIA has earmarked a proposed $15 billion for states to provide incentives for the semiconductor industry to set up shop in their backyard, while the remaining $17 billion would be allocated for research and development funding.

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Within the US, the SIA’s proposals appeal to have bi-partisan support. Republican and Democrat Senators are working on a bill that would allocate $110 billion in technology spending that would include semiconductor research.

Although some lawmakers would like federal funding to only be available for US firms, the SIA’s plan calls for funds to be available to both foreign and domestic firms that expand their presence in the US.

SEMI, an industry association comprising companies involved in the electronics design and manufacturing supply chain, has also been pushing for an investment tax credit for purchases of machinery used in semiconductor manufacturing.

All this comes as TSMC TPE:2330 beefs up its Washington presence by making a key government relations hire to augment its lobbying presence. Former US Chamber of Commerce executive Nicholas Montella joined the company last week to lead its government relations efforts. A few months prior, TSMC hired former Intel lobbyist Peter Cleveland to be its man in Washington. According to lobbyist directory OpenSecrets, TSMC has spent $478,000 in lobbying during the first quarter of 2020. Filings show that Cleveland lobbied the Department of Commerce and Defense about US wafer fab capabilities, and the Department of State about “receiving and maintaining optimal tariff and customs conditions.”

Separately, Taiwan’s Presidential Office has denied that Taiwan President Tsai Ing-wen played a personal role in advocating for TSMC to commit to building a fab in Arizona though spokesman Xavier Chang said that her office welcomed the plan.

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"President Tsai is delighted to see any investment that is helpful to Taiwan's economic development, but she will not get involved,” Chang is quoted as saying, reiterating that the move was based on business and not political considerations.

However, TSMC posted a filing on the Taiwan Stock Exchange days before the announcement saying it had no concrete plans to invest in the US owing to cost considerations in manufacturing semiconductors, though the company did indicate that discussions had been taking place.

It is unclear what perks and benefits Arizona provided to TSMC to pledge to open up shop in the state. Authorities in Arizona have yet to respond to Freedom of Information requests submitted by Wccftech.

TSMC’s stock is up 1% during Monday morning trading in Taipei.

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