Congress passes bill to provide $52 billion to semiconductor companies

US cities are racing to establish factories for "computer chips"

$450 billion in revenue for the semiconductor industry in 2020. From the source

The shortage of computer chips, also known as "semiconductors", has weakened the global economy, punishing industries such as automobiles and medical devices, and contributing to fears of hyperinflation.

But many states and cities in the United States are beginning to see a glimmer of hope in the possibility of increasing chip production in the United States, which will lead to the establishment of several factories for these chips in cities that are racing to benefit from this significant increase in chip industries.

Samsung activities

One of these towns is "Taylor" in Texas, which has a population of 17,000, and is about a 40-minute drive from the city of "Austin", as town leaders are working to eliminate all obstacles to establish a chip factory for the South Korean company "Samsung" at a cost of 17 billion. In their hometown, the company intends to set up such a factory in the United States at the beginning of 2022.

The town and its school district plan to provide hundreds of millions of dollars in incentives to Samsung, including tax credits, as well as water deliveries from a nearby town, for use in the planned plant.

But Taylor is not the only one doing this. Officials in Arizona and Ginsey, upstate New York, are also trying to sway Samsung.

Currently, in the town of Travis, there is a factory for "Samsung", which said that it has received significant tax relief in these areas, in addition to financing for the construction of the factory.

governmental support

In turn, the US Congress is studying the possibility of providing support to chip factories in the United States.

The federal government has urged companies such as Samsung, which is the world's largest maker of high-tech components, to build factories in the United States, describing this as a national security and economic necessity.

The company "Intel", the computer manufacturer, began setting up two factories in the state of "Arizona" last September, at a time when it is expected to announce an industrial assembly site at the end of this year.

In addition, the US Congress passed a law to provide chipmakers with $52 billion in subsidies during the year, a plan backed by the administration of President Joe Biden, and it would be the largest investment in industrial policy in decades.

Nine state governors said in a letter to congressional leaders that this funding "will provide a new and powerful tool for economic development in our states."

Semiconductors

The majority of chips, also known as "semiconductors", an industry with revenues of 450 billion dollars in 2020, take place in Taiwan, South Korea, and China, while the United States controls 12% of global production from this industry.

Therefore, members of Congress say that the lack of chips illustrates how the limited US role in this industry puts its economy in a critical situation, at a time when politicians fear that China will increase its control over global supplies of semiconductors, which puts the United States in a bad position. It faces a major geopolitical rival, which will have national security implications.

But the attempts of American cities to attract these factories raise many questions about how far these communities must go, and how much taxpayer money they must pay, in order to get a part of this highly technological economy.