WSJ, Citing Sources... "In Discussions with Biden Administration"
"Intel Likely to Be the Biggest Beneficiary... Separate from Support for Other Factories"
Intel, a leading US semiconductor manufacturer, is reportedly in discussions with the US government to receive support funds exceeding 5 trillion won for building a secure facility to produce semiconductors for military and intelligence applications, the Wall Street Journal (WSJ) reported on the 6th (local time).
WSJ cited multiple sources saying that the US Department of Commerce, the Director of National Intelligence (DNI), and the Department of Defense are in talks with Intel regarding this matter, but no final decision has been made yet. These discussions are said to be taking place as the US government seeks to reduce dependency on semiconductors imported from East Asia, including Taiwan, due to vulnerabilities such as potential Chinese invasion, by establishing secure facilities.
Advanced semiconductors are essential for various military operations and intelligence warfare, including artificial intelligence (AI), espionage, and cyber warfare. They are also heavily integrated into cutting-edge jets, missiles, and other advanced weapons. Therefore, the US government views it as crucial to build semiconductor manufacturing facilities domestically to meet these needs.
WSJ assessed that Intel is expected to be the biggest beneficiary of this initiative. The secure facility Intel plans to build is anticipated to be part of the new factory under construction in Arizona. Sources indicated that the amount of support could be between $3 billion and $4 billion (approximately 3.9 trillion to 5.23 trillion won) out of the total $39 billion (about 51.04 trillion won) in subsidies the US government plans to provide to semiconductor manufacturers.
WSJ stated, "This plan reflects how semiconductor supply chains have become central to geopolitical power and military strength, with the US government deeply involved in securing them through private industry," but also noted, "The Biden administration has not yet finalized the exact amount of support it can provide."
However, some skepticism exists about whether it is necessary to build separate manufacturing facilities and pour massive subsidies specifically for military-use semiconductors. Critics point out that special military facilities used in the defense industry account for only 2% of the entire semiconductor market, suggesting that the costs may be excessive.
Three senators?Jack Reed, Chairman of the Senate Armed Services Committee (Democrat), Roger Wicker, Ranking Member of the Senate Armed Services Committee (Republican), and Maria Cantwell, Chairwoman of the Senate Commerce Committee?expressed concerns in a letter sent last month to Commerce Secretary Gina Raimondo. They stated, "We are concerned about the consideration of providing massive subsidies to a single company for building a secure facility."
They added, "Doing so could limit funds available for other projects during the critical process of diversifying the domestic semiconductor supply chain, which underpins the defense industry."
Earlier, the Biden administration enacted semiconductor support legislation in August last year and has since received applications from interested companies this year. More than 500 companies submitted letters of intent expressing interest in the subsidies, and over 130 companies filed preliminary applications. The US Department of Commerce plans to begin distributing funds within weeks based on the applications submitted.
Intel has applied for separate subsidies not only for the secure facility but also for new factories being built in Arizona and Ohio. Pat Gelsinger, Intel’s CEO, has met with Secretary Raimondo and other government officials to discuss these matters.
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