US FABS Act Could Accelerate IC Onshoring
TSMC may have already received enough sweeteners to assure its first of six planned IC (integrated circuit) production facilities in Arizona, but if Senators Ron Wyden (D-OR), Mike Crapo (R-ID), Mark Warner (D-VA), John Cornyn (R-TX), Debbie Stabenow (D-MI), and Steve Daines (R-MT) have their way, the firm might just be pressured into not waiting so long to start building the other five. That’s because the newly introduced Facilitating American-Built Semiconductors (FABS) Act would set strict time limits on providing such manufacturers up to 25% of their construction and equipment cost up front, via taxpayer funding. This is in addition to any funding available through the United States Innovation and Competition Act of 2021 that recently passed the senate.
All of these plans are designed to help the US reduce supply threats from China, but with the US government currently operating in deficit mode, this potential corporate windfall could similarly accelerate a broadly anticipated period of monetary inflation. Without drastic stabilization efforts from the Fed, the potential payoff in US employment and a reduced trade deficit could eventually help to stabilize US currency at its then-devalued level.
Global head of corporate communications for Micron Technology, Erica Rodriguez Pompen praised the initiative, before calling upon Congress to approve funding for the already-passed CHIPS for America Act. While passage of the latest bills and funding of the previous effort remain to be seen, a combination of all three would make 2021 a great time to be a chipmaker in the US.