The US Senate has approved the CHIPS Act, by a vote of 64-33, a bill that would provide $52 billion in aid funds to semiconductor manufacturers looking to make products in the US, along with a 25% tax credit for investment in the industry, as well like research and workforce development grants.
The bill still needs approval from the US House of Representatives and President Biden, a vocal supporter of the legislation, to become law.
While $2 billion of the direct aid funds are already earmarked for legacy programs—specifically, technologies that the Department of Defense wants to produce within the U.S.—the remaining $50 billion is generally available for domestic silicon manufacturing. further develop in the country.
The big winners, if the CHIPS Act is signed into law, will be companies like Intel, which already have chip manufacturing facilities in the US or are planning to build them – but other chip companies, especially those with a key role them in a chip. design but don’t make products themselves, caution that the bill doesn’t go far enough to help the US silicon industry.
Lawmakers also encouraged chip designers to help
Vinay Ravuri, CEO of wireless chip design company EdgeQ, said in a statement that the U.S. risks losing its leading edge in innovation if funding is not made available to other less-good silicon designers and firms.
“The CHIPS [Act] it addresses a scaling issue. But it doesn’t address intelligence,” he said. “To be relevant, we need to invest in cutting-edge companies, especially those that want to disrupt the industry and lift it into new territories, such as 5G and AI.”
Gartner Research vice president and analyst Gaurav Gupta said EdgeQ is far from the only company blocking the bill’s exclusive focus on the manufacturing end of the silicon industry.
“If you talk to people in the industry, you get that perception that it’s not going to benefit everyone equally,” he said.
However, Gupta said, the CHIPS Act remains a game changer for chip making in the United States, making it much more competitive with overseas semiconductor manufacturing, which has much lower production costs. Generally.
“This gives OEMs and fabless companies the option to buy devices from here,” he said. “And the reason these companies won’t come here is if there isn’t an incentive through the CHIPS Act, because there’s clearly a cost gap between running a fab in Asia and running one here.”
Chip revenue is predicted to decline
The likely passage of the CHIPS Act comes at the right time for the semiconductor industry as a whole, as new figures released today by Gartner show that semiconductor revenue growth will slow sharply over the next 18 months. Global revenue is projected to grow by 7% during 2022, down from a whopping 26% in 2021, and to decline by 2.5% in 2023.
Practice Vice President Richard Gordon said that could be good news for customers, however, as prices could begin to decline and the lead time between purchase and delivery will decrease.
“The semiconductor market is entering a cycle of industry decline, which is not new, and has happened many times before,” he said in a statement accompanying the results. “While the consumer space will slow, semiconductor revenue from the data center market will remain resilient for a longer period (20% growth in 2022) due to continued cloud infrastructure investment.”
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US Senate approves $52 billion for chip makers—but not designers
Source link US Senate approves $52 billion for chip makers—but not designers