Abstract: News on March 1, comprehensive New York Times, Bloomberg information and other foreign media reports, the US Department of Commerce on February 28 local time issued the application of a total of 39 billion US dollars of "chip manufacturing subsidies" specific detailed requirements, it is reported that it will be accompanied by a variety of requirements beyond expectations, showing that the policy is far more than encouraging local semiconductor production, but also shows that the Biden administration in the United States hopes to use the "chip bill" to pursue its economic benefits.
News on March 1, comprehensive New York Times, Bloomberg and other foreign media reports, the US Department of Commerce on February 28 local time issued a total of 39 billion US dollars of "chip manufacturing subsidies" specific detailed requirements, it is reported that it will be accompanied by a variety of requirements beyond expectations, showing that the policy is far more than encouraging local semiconductor production, but also shows that the Biden administration in the United States hopes to use the "chip bill" to pursue its economic benefits.
According to the "Chip and Science Act" previously released by the United States, of the $52.7 billion subsidy plan in the United States, $39 billion will be used as a "chip manufacturing subsidy", of which $2 billion will be explicitly used to focus on the production of traditional mature process chips to promote economic and national security interests. These chips are critical to the automotive industry, the military, and other critical industries. The remaining $37 billion is mainly used for the production of advanced process chips. In the incentive program, up to $6 billion can be used for the cost of direct loans and loan guarantees.
If the relevant manufacturers want to apply for the "chip manufacturing subsidy", then they need to meet the following requirements:
1. Detailed financial statements and financial projections need to be attached, and a specific percentage of "out-of-expectations" profits must be shared with the U.S. federal government;
2. Priority will be given to companies that promise not to use the subsidy to buy back shares.
The Chips and Science Act has banned companies from directly using federal subsidy money to buy back shares or pay dividends.
U.S. Commerce Secretary Raimondo said the financial rules would encourage companies to apply only for the money they really need, avoiding sending U.S. taxpayer money to shareholders.
3. Manufacturers applying for subsidies of more than 150 million US dollars should also propose child care plans for employees and construction workers.
Commerce Department spokesman Legakey told The Washington Post that companies seeking more than $150 million in subsidies will be required to inform the federal government of "plans to provide child care programs for their employees and construction workers" and that they will ensure that they will provide affordable and high-quality child care to workers who build or operate factories.
The U.S. Department of Commerce further explained that applicants can use part of the grant to meet certain requirements, such as building child care centers at or near the construction of the factory, paying child care providers to increase child care benefits, or directly subsidizing the cost of care for workers. Commerce Department officials will develop basic guidelines to provide examples of childcare programs in the coming weeks, but they will not be mandatory.
4. According to the funding application process, enterprises that have obtained other sources of private capital will receive "strong preference" of government subsidies, and applicants must also have obtained subsidies at the level of other states or local governments to be eligible, so as to create a "spillover effect" that benefits the local area.
Raimondo said companies must show her team the ledger, and the goal of the grant is to "include" private investment, not "crowd out."
In general, non-US semiconductor manufacturing companies, including TSMC, Samsung, and Universal Wafers, must meet more U.S. requirements to receive subsidies. However, the expenses proposed by the United States such as open accounts, sharing of profits that exceed expectations, and childcare for employees and factory builders will make manufacturers who intend to apply for subsidies face pressure such as higher costs and diluted profits.
In addition, the published Chips and Science Act explicitly requires recipients of federal financial aid to join an agreement prohibiting certain substantial expansions of semiconductor manufacturing in China or other relevant countries. These restrictions will apply to any new facility unless it primarily produces "conventional semiconductors" for the national market, although existing facilities for manufacturing conventional semiconductors will not be affected. These limits will apply for 10 years after receiving financial assistance to ensure semiconductor manufacturers focus their next cycle of investments in the U.S. and partner countries.
、
Companies that receive federal financial assistance through the CHIPS program will also be required to notify the U.S. side of the country's investment plan, subject to an agreement with the United States. If a breach of the agreement is discovered, the relevant business will have the opportunity to remedy the potential violation. If this is not possible, the United States will be able to recover the full amount of federal financial assistance provided. The provision gives the U.S. authority to request any records needed to review compliance with the agreement, while ensuring that those records remain confidential.
The industry pointed out that TSMC, Intel, Samsung, and Universal Wafers have been working in the mainland for many years, and have all begun or have announced plans to build factories in the United States, and are all striving to obtain subsidies from the US government to alleviate the high cost pressure of building factories and manufacturing semiconductors in the United States. However, if the US requires companies to set up factories in the United States to receive subsidies, they will not be allowed to expand investment in Chinese mainland "non-traditional semiconductors" in the next 10 years, coupled with the new regulations on semiconductor export restrictions to China issued by the United States in October last year, which is equivalent to blocking the path of these semiconductor giants to continue to develop upward in the mainland.
Editor: Xinzhixun - Ronin Sword