The Semiconductor Industry Association, a trade group, is lobbying for $37B in federal funding that would include subsidies for the construction of a new chip factory, aid for states trying to attract semiconductor investment, and an increase in research funding, the Wall Street Journal reports, citing a draft of the proposals that it viewed. The global COVID-19 pandemic has deepened concerns over the U.S.'s dependence on Asia for tech products and competing with China and renewed debate about government's role in nurturing innovation. The SIA recommendations include $5B in federal funding for a new semiconductor factory that would be financed and operated in cooperation with the private sector. Intel (NASDAQ:INTC) CEO Bob Swan had proposed in April that the company work with the Pentagon to build and operate such a facility. $15B would go to states as block grants to provide incentives for new chip manufacturing facilities and $17B would go to federal research funds. A different trade group, SEMI, has also been lobbying for investment tax credit for purchases of machinery. Under the SIA proposals, the funding would go to build facilities in the U.S., but would be available to U.S. and non-U.S.-based companies. Although the SIA said its plan doesn't choose favorites, the $5B for foundry development was seen by some in the government and industry as an incentive for Intel to build a plant, rather than a non-U.S.-based firm, WSJ said.
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