The Latest U.S. $52 Billion Semiconductor Investment

The China Competition Bill, which recently passed in Congress, will allocate $52 billion for the U.S. semiconductor industry. In this segment from "Semiconductor Revolution," recorded on Feb. 3, Motley Fool contributor Will Healy explains the impact of the bill on companies such as Intel, Texas Instruments, Micron, and GlobalFoundries. 

Will Healy: I'm discussing today an article I found, it's titled US House China competition bill heads to passage this week. It's from the business section of Reuters. Basically, the House of Representatives is going to advance the bill allocating $52 billion for the semiconductor industry. It's called the China Competition Bill. But among it is money for the industry. This is a side to say, the senate has already passed a similar bill and President Biden has already indicated, he's going to sign the bill. Basically, all that needs to happen is that the House and Senate have to go into the committee, agree on what the bill's going to look like, pass that bill and the President will sign it.

The main beneficiaries of such agreement are going to be Intel, TI, Texas Instruments, Micron, and Global Foundries. What's not clear is how the foreign companies who own fabs within the US are going to be affected. As most of you who own fabs within the industry closely know, TSM is building a huge fab in the Phoenix area. Samsung already has a presence here. They're going to have a much bigger presence when they build their fab near Austin. It's not clear whether or not they are going to benefit from this.

But just as an aside, 20 years ago, the US accounted for about 37 percent of the world production, and over the next 20 years that fell to about 12 percent. That's caused a lot of concern on many levels. About 2/3 of the production takes place in Taiwan now. So there is some national security and some supply chain issues related to that. I think there's a lot of national pride on the line too.

Yesterday, Nick and I talked to the CFO of Qualcomm, which we'll go into more detail later. But I asked him about that because as soon as Intel Foundry Services was founded, they were announced as a perspective client. I asked the CFO why Intel? He just said, "We're an American company and we went to support American industry." Now, Intel is going to have to prove that they can do the job. Assuming they can, they are probably going to get a lot of business just for that reason. It seems to be important to a lot of people that more production happens stateside. It's an interesting development. It looks like there's going to be about 52 billion in subsidies going to the industry overall.