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U.S. Chip Act Should Include Foreign Firms, Trade Group Says

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(Bloomberg) -- A major trade group urged Washington to make a $52 billion grant for the semiconductor industry available to foreign companies as well as domestic ones.

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In order to build a strong ecosystem at home, non-U.S. chipmakers including Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. should be eligible for the funding, said Bertrand Loy, chairman of SEMI, which counts 2,400 of the industry’s firms as members. TSMC and South Korea’s Samsung, the world’s largest foundries, are already building new plants in America to add capacity in the country.

“The semiconductor industry is a highly intricate ecosystem that relies on companies from Japan, Europe, North America, Taiwan, China,” Loy said in an interview on Tuesday. “If the objective of the U.S. administration or any other administration is to foster the proper conditions for the semiconductor industry to flourish in their country, they have to make those aids available to all participants, irrespective of their country of origin.”

The Biden administration is seeking to offer $52 billion for the industry through the CHIPS (Creating Helpful Incentives for the Production of Semiconductors) for America Act, as part of efforts to bolster chip production at home. The U.S. is among major countries around the world racing to bolster their domestic semiconductor supply chains to avoid a repeat of the microelectronics shortage that has plagued industries over the past year.

The CHIPS Act was included in a large package of legislation aimed at countering China that was passed by the Senate in June. That legislation, called the U.S. Innovation and Competition Act, has since stalled in the House. In November, Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi announced an agreement to craft a version of the bill that could pass in both chambers. So far, that has not yielded any new proposals.

Even before the funding gets formally approved, companies have been squabbling over who can qualify for the incentives. Intel Corp. CEO Pat Gelsinger has repeatedly suggested U.S. taxpayers should subsidize only domestic companies, while TSMC Chairman Mark Liu said doing so would be “negative” for America.

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SEMI’s Loy, who is also the chief executive officer of U.S. chip materials supplier Entegris Inc., say it’s also critical for the chips grant to be made available to equipment and materials vendors, which play an essential role in the supply chain.

“If those incentives are not available to materials and equipment companies, you’d create choke points in the supply chain,” he said. “It’s to everybody’s advantage for those incentives to be broad-based and across the ecosystem.”

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