US legislation aims to boost chip production

The US House has recently passed a bill aimed at streamlining federal permitting for semiconductor manufacturing projects, a move anticipated to benefit companies like Intel and TSMC. This legislation seeks to address concerns that lengthy environmental reviews could hinder the construction of domestic chip plants, an essential component of US manufacturing strategy, especially as chipmakers have pledged around $400 billion in investments following the 2022 Chips and Science Act.

Many projects are experiencing delays despite investments. Intel’s facilities in Arizona, initially scheduled to open in 2024, may now begin operations in early 2025. Additionally, a $20 billion project in Ohio has been pushed back beyond 2026 due to market challenges and subsidy holdups. The new bill introduces criteria to exempt some projects from National Environmental Policy Act (NEPA) reviews, enabling construction to start before the year ends.

The legislation poses a challenge for the Biden administration, which seeks to enhance domestic manufacturing while achieving ambitious climate targets. As the government tackles this dilemma, the urgency to lessen dependence on Asian chip production, especially from Taiwan, continues to be a key priority.