The United States and the European Union may have introduced stimulus policies for the chip industry, according to the latest news, U.S. House Speaker Nancy Pelosi said the House of Representatives is about to complete legislation aimed at strengthening the U.S. semiconductor industry to deal with overseas competition, which will provide nearly $52 billion (about RMB 330 billion) in grants and incentives for the U.S. semiconductor industry. Meanwhile, European Commission President von der Leyen announced on January 20 that in February this year, the EU will introduce a “chip bill” aimed at boosting EU chip production capacity from the current 10% of the world to 20% by 2030.
U.S. chip giant Intel took the lead in responding to the news on January 21, local time, Intel plans to invest $ 20 billion to build at least 2 chip manufacturing plants in the U.S. state of Ohio, covering an area of up to 1,000 acres, will begin construction in 2022, and is scheduled to be operational in 2025. Intel CEO Pat Kissinger said the total future investment could increase to $100 billion to build a total of eight plants, which would be the largest investment ever in Ohio and possibly the largest chip manufacturing base in the world in the future.
Deloitte predicts that many types of chips will still face shortages during 2022, but not as severe as in the fall of 2020 or 2021, and global semiconductor sales are expected to grow a further 10 percent in 2022 to $606 billion.
330 billion chip stimulus plan
On January 21, local time, U.S. House Speaker Nancy Pelosi said in her weekly briefing that the U.S. House of Representatives is about to complete legislation aimed at strengthening the U.S. semiconductor industry to deal with overseas competition, and the bill is almost ready to be merged with a similar bill passed by the Senate to be passed in Congress.
Pelosi revealed the name of the bill “chip bill”, the purpose is to enhance the strength of the U.S. chip industry chain, and efforts to solve the global chip shortage dilemma.
According to Reuters, the “Chip Act” will provide the U.S. semiconductor industry with nearly $52 billion (about RMB 330 billion) in grants and incentives, including $39 billion in production and R&D incentives, and $10.5 billion in implementation programs, including the National Semiconductor Technology Center, the National Advanced Packaging Manufacturing program and other R&D programs.
Currently, the “Chip Act” has received bipartisan support, including President Biden. This means that the scale of the $ 52 billion chip stimulus bill, from the landing, may only be a matter of time, or will change the U.S. semiconductor industry chain in the global market competition pattern.
In this regard, Intel CEO Pat Kissinger said in an interview, the United States does not waste the global lack of core of this crisis, optimistic about the United States promoting government funding to support the construction of chip factories, the United States, the European government should provide financial support for the return of chip manufacturing to the local.
He said that the chip industry is in an inflationary environment, and remained optimistic about the passage of the “chip bill”. It is understood that more than 50 U.S. company executives in December last year urged the U.S. Congress to pass the bill as soon as possible to provide $ 52 billion in incentives for domestic chip manufacturing to encourage chip design and manufacturing.
In fact, as early as June 2021, the “chip bill” was approved in the U.S. Senate, but in the subsequent legislative process, the bill has been stalled. Last November, Pelosi and Senate Majority Leader Schumer announced an agreement to resolve the differences between the House and Senate, before taking out a unified legislative program.
Not only the United States, but the European Union grabbing the share of the chip is also very determined. On January 20, the European Commission President von der Leyen announced that in February this year, the EU will introduce the “chip bill”, aimed at the EU chip production capacity from the current 10% of the world to 20% by 2030.
According to von der Leyen, the Chip Bill will help the EU enhance its chip R&D and innovation capabilities, pave the way for public support for EU-first production facilities, enhance the ability to respond to shortages and crises, and support small innovative companies.
Chip giants set off a wave of expansion
In the face of huge subsidies from the U.S. government, the chip giant has long been eager to move.
Local time on January 21 news, Intel plans to invest $ 20 billion (equivalent to about 130 billion yuan) to build at least 2 chip manufacturing plants in the U.S. state of Ohio, covering an area of up to 1,000 acres. Intel CEO Pat Kissinger said the total investment in the future may increase to $100 billion to build a total of eight factories, which will be the largest investment ever in Ohio and maybe the largest chip manufacturing base in the world in the future. Intel will aim to invest in manufacturing capacity to meet the growing demand for advanced semiconductors and to build a more resilient, globally balanced supply chain.
Intel’s plant will reportedly employ at least 3,000 people and be the largest private investment in Ohio’s history. Construction of the plant will begin in 2022 and is scheduled to be operational by 2025.
In fact, in 2021, Intel set out plans to revive its former glory, planning to build a new chip factory to reduce the semiconductor industry’s reliance on Asian manufacturers. Intel announced plans to build a $20 billion chip manufacturing plant in Arizona and a $3.5 billion chip factory in New Mexico.
Other major chipmakers, such as TSMC, Samsung, and Micron Technology, are interested in establishing new chip manufacturing plants in the United States.
As early as June 2021, TSMC’s $12 billion chip plant in Arizona, U.S., has already started construction and is expected to be completed and put into operation in 2024. TSMC will also plan to build up to six fabs in Arizona in the next 10 to 15 years.
In addition, according to the latest news reports, Samsung has confirmed to build a factory in the United States, the final site in Texas, the investment of up to $ 17 billion, which will be Samsung’s largest investment project in the United States, according to plans, will break ground in the first half of 2022, in the second half of 2024 into operation.
TSMC has scheduled more than $40 billion in capital expenditures this year, and South Korea’s Samsung will likely announce its investment plans when it reports earnings on Jan. 27. Wall Street analysts unanimously expect Samsung’s investment budget to be about $36 billion.
Is there a shortage of chips in 2022?
2021, perhaps the most torn year in the global chip industry, one side is a very strong demand, while the other side is a continued shortage of semiconductors, chips, and other production capacities.
The chip market has repeatedly staged a rush to buy chips, hoarding, price gouging, and other chaos, which once caused the price of some automotive chips to continue to rise, some up 3-10 times, individuals up to 30-40 times, and has been out of stock.
According to the latest data from research firm AutoForecast Solutions (hereinafter referred to as AFS), as of December 19, due to chip shortages 2021 global automotive market cumulative production reduction of 10,272,000 units, will make the global automotive industry 2021 lose $ 210 billion in revenue.
This also makes, 2021 has become a chip industry “harvest year”. According to the results of TSMC, the global chip leader, sales for 2021 reached NT$158.72 billion (about RMB365.7 billion), up 18.5% year-on-year, the highest ever recorded.
The chip shortage situation still does not seem to have significantly improved going into 2022. 2021 new chip capacity will take 18 to 24 months from plant construction to capacity release to enter the supply chain. Therefore, in the first half of 2022, the situation of automotive shortage of cores may continue, and the shortage of cores is expected to improve only in the second half of 2022.
According to supply chain sources, TSMC’s 2022 capacity is still very much in demand, with dozens of customers such as Apple, AMD, Nvidia, and Qualcomm paying money in advance to ensure that subsequent production can proceed smoothly.
Some institutions said that the demand side of new energy vehicles, 5G, IoT, and other emerging areas of chip demand continues to grow, while the global new chip production capacity has not yet been released on a large scale, the current point in time, the global chip delivery period still continues to extend, prices continue to rise, industry supply and demand will remain tight in the short term.
Deloitte predicts that many types of chips will still face shortages during 2022, but will not be as severe as in the fall of 2020 or 2021, and will not affect all chips; by the end of 2022, the chip delivery cycle will be close to 10-20 weeks; by early 2023, the industry will reach a basic balance.
Deloitte said that the global demand for chip-enhanced products continues to expand, chip usage is growing dramatically, but throughout 2022 will be forced to wait until the supply catches up with the continued growth in demand, especially for locally manufactured chips, global semiconductor sales are expected to grow a further 10% in 2022 to $606 billion.
