The delay in the U.S. "chip bill" has seriously affected the expansion plans of large semiconductor companies

According to a recent report in The Wall Street Journal, a number of large U.S. semiconductor companies have sparked political strife within Congress over government subsidies for the semiconductor industry, leading to tens of billions of dollars in potential fab projects in limbo and potentially undermining the ambitions of some political and industry leaders to revitalize chip manufacturing capabilities for the United States.

Many companies are waiting for Congress to pass a $52 billion incentive program for chip production and research before planning further expansion plans, according to some company executives and funding proposal documents. These expansion plans are expected to receive partial funding from the subsidy program, which received early bipartisan support from Congress and the Biden administration.

Under the "Chip Act" charter, Congress has announced about $50 billion in factory investments over the past two years, and these planned new facilities are the top priority for investment as the industry scales up to meet growing demand. Critics of government funding for semiconductor makers say the industry is taking advantage of the chip shortage and that companies will continue to move forward with U.S. projects even without subsidies.

Government funding is aimed at reviving U.S. chip production as manufacturing has shifted to Asia in recent decades because of substantial financial inducements and lower manufacturing costs. The U.S. share of global chip manufacturing capacity has fallen from 37 percent in 1990 to 12 percent today. A two-year chip shortage has led to the shutdown of auto plants and soaring prices for some electronics, prompting the introduction of domestic government incentive programs in the United States.

Micron CEO Sanjay Mehrotra said, "We will need support from the federal government as well as state governments to make up for the 35-45 percent cost differential that exists in overseas production."