US, semiconductor firms in ‘tough’ talks over funding American chip manufacturing: commerce secretary

Negotiations will result in each company ‘doing more for economic and national security at a lower cost to the taxpayer’, says Gina Raimondo

As US tries to outpace China, leading chip makers Intel, TSMC and Samsung Electronics have requested about US$70 billion in federal funding

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US Commerce Secretary Gina Raimondo has voiced confidence that American-made leading-edge chips can go from zero to 20 per cent of global production by 2030. Photo: AFP

Published: 6:30am, 27 Feb 2024Updated: 6:50am, 27 Feb 2024

The US commerce secretary on Monday revealed she was having tough conversations with semiconductor companies seeking billions of dollars in grants to bring chip manufacturing stateside in the country’s drive to edge out China and achieve more for American security with less money.

“We have to be tough with companies,” Gina Raimondo said in remarks at the Centre for Strategic and International Studies, a Washington-based think tank. “Our tough negotiations with individual companies will result in each one of them doing more for economic and national security at a lower cost to the taxpayer.”

Stressing there was a “finite amount of money to meet our urgent national security goals”, Raimondo noted leading chip makers had requested about US$70 billion in federal funding.

The manufacturers include Intel, Taiwan Semiconductor Manufacturing Company and Samsung Electronics.

American semiconductor production dropped from 37 per cent in 1990 to just 12 per cent last year owing to significant manufacturing cost differences between the US and other countries like China. No advanced chips are made stateside.