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Sunday, March 31, 2024

Wrangling over a second wave of DC chipmaking money is already underway

 A vigorous debate has already begun about whether the US semiconductor sector will need a second wave of support from Washington in the years ahead—as well as what it might look like.

Intel (INTC) CEO Pat Gelsinger, one big beneficiary of the 2022 CHIPS and Science Act, weighed in on the topic earlier this month as he announced his company's $8.5 billion government grant for a range of new chip projects.

"I don't think CHIPS 1 is the end of what we need to do to rebuild the industry," he said.

He is far from the only one. Commentary is piling up among business officials, Biden cabinet members, think tank roundtables, and on Capitol Hill as the different players signal their interest as well as the elements they might like to see in a potential second round.

Senator Mark Kelly is an Arizona Democrat who helped negotiate the first bill. He first wants to help chipmakers cut red tape as they build new projects. Then he is open to more after that.

He recently told Yahoo Finance "we need to do things that will make our supply chain stronger, so we're going to assess how this is going and we will figure out what else is needed."

Intel CEO Pat Gelsinger shows US President Joe Biden a processor and semiconductor wafer during a tour at Intel Ocotillo Campus in Chandler, Arizona, on March 20, 2024. The White House unveiled almost $20 billion in new grants and loans Wednesday to support Intel's US chip-making facilities, marking the Biden administration's largest funding announcement yet as it tackles China's dominance of the crucial technology. (Photo by Brendan Smialowski / AFP) (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)
Intel CEO Pat Gelsinger shows President Joe Biden a processor and semiconductor wafer during a tour at Intel Ocotillo Campus in Chandler, Arizona on March 20. (BRENDAN SMIALOWSKI/AFP via Getty Images) (BRENDAN SMIALOWSKI via Getty Images)

The chatter comes as the current law is just getting underway. But it's a conversation some say needs to happen soon, with most muscular provisions due to expire in a few short years and Washington not known for moving quickly.

"My view is that if they wait 3 to 5 years before they start talking about it, it's going to be way too late," says Caitlin Legacki. She is a former senior advisor to Commerce Secretary Gina Raimondo and notes that the demand for grants has already far outstripped the $50 billion available.

More than 18 months transpired between when the bill that became the CHIPs and Science Act was first introduced and when President Biden signed it into law. And it was another another year and a half with the law on the books before grants began rolling out in earnest.

https://finance.yahoo.com/news/the-wrangling-over-a-second-wave-of-dc-chipmaking-money-is-already-underway-133047483.html

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