Chip, why doesn’t the US help Applied Materials?
The United States has denied Applied Materials access to Chips Act funds to build a research and development center in California. Aresu's facts, hypotheses and analysis
The United States has denied Applied Materials, the largest American semiconductor manufacturing machinery company, access to Chips Act funds for the construction of a research and development center: the structure is worth 4 billion dollars and should be built in Sunnyvale, California, that is, in the heart of the so-called “Silicon Valley”.
WHAT HAPPENED
According to Bloomberg sources, the US Department of Commerce rejected Applied Materials' request for public funding because the project did not meet the necessary requirements.
The American authorities have already denied other companies access to funds from the Chips and Science Act – the 2022 law for the development and production of semiconductors on the national territory worth 280 billion dollars in total -, but the rejection of Applied Materials it is nevertheless remarkable, considering how much alignment there was with the political-industrial objectives of Joe Biden's administration regarding semiconductors.
WHY DID THE UNITED STATES REJECT THE REQUEST FOR APPLIED MATERIALS?
According to Bloomberg , the decision of the Department of Commerce seems to indicate that the American government does not want to subsidize large companies that build chipmaking machinery, perhaps preferring to conserve resources to incentivize the manufacturing phase, to which 52 of the 280 billion in chips are dedicated Act.
To date, as can be seen from the graph, the United States has authorized 11 billion in financing for the microchip research and development segment (which includes the Applied Materials plant in California) and 39 billion in subsidies for manufacturing factories.
THE ARESU ANALYSIS
On . At the same time, Applied still has a strong dependence on China for its revenues, which as can be seen has grown in 2024. Those numbers mean that the USA currently, beyond the rhetoric, provides various licenses to Applied to export to China” .
“Now”, continues the analyst, “the US subsidies have so far gone mainly to large production investments (and advanced packaging ), but the injection of public funds has now generated a broad appetite which involves companies like Applied but also everything the design ecosystem “, that is, planning, the initial link in the supply chain that leads to the finished product.
“At this stage of the chip war, China's market constraint remains relevant for now, generating security risks and deep disagreements as companies across various segments seek an ever-larger piece of a US public 'pie' now sparse”, concludes Aresu.
– Read also:Microchip, all China's espionage towards Applied Materials and beyond
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/applied-materials-incentivi-negativi-stati-uniti/ on Fri, 02 Aug 2024 11:58:10 +0000.