The delay of the US chip law angers Intel that threatens to produce more in Europe

That Europe has taken the lead over the US in terms of regulation and future production of chips is well known. It was last February when the call was initialed European Union Chip Law by 2030. The objective is none other than not to depend on China -producer of more than three quarters of chips in the world- and to a lesser extent on the US. The bet is ambitious: an investment of 45 billion euros over 8 years and juicy contracts with giants such as Intel, TSMC and Samsung to create a fab of gigantic significance. But what role does the US play in all this?

The country’s situation in this field is more cloudy than clear. Asia, of course, has and will continue to have a key leadership in chip production at least in the medium/long term until the EU dream comes true. Nevertheless, the US chip law itself seems to be encountering more pitfalls than it anticipatedat least that is what Pat Gelsinger, the CEO of Intel, has declared, who has even dropped that said law may not see the light of day, at least in the short term.

Intel has deferred construction of what was to be a $20 billion megafab in Ohio. What could place the North American giant behind the Chinese and European positions. The reason is the dissatisfaction of Intel in the lack of approval of the 52 billion dollars in subsidies necessary for the manufacture of semiconductors. Therefore, Intel could choose to give priority to its project in the old continent compared to American aspirations. “The rest of the world is moving quickly despite the inability of Congress to end this issue,” Gelsinger has come to declare.

The delay of the US chip law angers Intel that threatens to produce in Europe

Intel threatens to produce in Europe and not in the US

And it is that US legislators continue to disagree or at least not pay all the attention that, according to Intel, the issue requires. Since they would be absorbed in other economic and social issues that would in turn be preventing or rather distracting the country’s legislators regarding the long-awaited US chip law.

Nevertheless, Gelsinger does not give up and continues to pressure Congress for the approval of the so-called United States Competition and Innovation Actalso known as the America COMPETES Act, which includes the Fund for the creation of useful incentives to produce semiconductors, that is, chips.

Although at first everything seemed to be progressing at a good pace, the disagreements and the apathy of the US Senate and Congress are causing said law to remain fallow and remain unofficial. “It is a crucial moment, if we do not act now… Please, do not hesitate in Congress for partisan issues,” Gelsinger declared in front of the media, issuing a warning to the country’s politicians.

It goes without saying that the US, like Europe, it also needs chip factories to deal with future crises like the current one that could endanger the global supply chain. In this regard, the EU has taken the lead. Among the projects, an investment of 6,800 million euros stands out for an Intel factory in Germany.

Public-private collaboration is important to carry out projects of this magnitude. In fact, government subsidies are and will be essential to open plants in Europe, India and South Korea, being able to oscillate between 30 and 50% of the total cost of the project. In China, the figure reaches even 70%.

With the US chip law, it is estimated that each factory will receive up to 3 billion dollars in subsidies. Without this capital, according to Gelsinger, the Ohio plant, for example, would not be “economically viable.” for now, Intel’s CEO has given Congress until August and Intel will decide whether to produce its future chips in the US or on European soil.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *