Beatrice Quinn 
Summary
The forthcoming AI chip production subsidies in the US, due under the 2022 CHIPS Act, are posed to deliver significant financial investments to Taiwan Semiconductor Manufacturing (TSMC), Intel, and Samsung. Yet, the allocation of these funds highlights uncertainties surrounding the future of AI technology and the gamble on Intel’s success amidst the ever-evolving tech industry.
AI Chip Production Subsidies Presents Uncertainty for the US
While the US government is keen on promoting AI chip manufacturing, identifying the deserving recipients of the upcoming funds remains a contentious issue. The administration is currently deliberating the division of taxpayer money between TSMC and Intel. The crux of the problem lies in the dilemma of dividing funds between TSMC, an influential overseas leader in the space, and Intel; an embattled domestic company, with promising but yet-to-be-proven recovery initiatives.
The Bet on AI Chips
The fluid nature of the tech industry makes betting on AI chips a risky venture. Providing subsidies to the likes of Intel, TSMC, and Samsung, which is vying for Federal funds, doesn’t ensure future security in the unpredictable AI sector. As Jay Goldberg, CEO of D2D Advisory, points out, the ever-changing landscape of AI technology makes it a difficult gamble for any company aiming for long-term success.
Strategic Investment Insights
The CHIPS Act of 2022 will play a crucial role here. Intel, TSMC, and Samsung, who are all building their factories in the US, are likely candidates for receiving some degree of these US subsidies. However, the question remains how will US officials distribute this money to facilitate the production of AI chips most effectively? But for those looking for investment opportunities, this situation presents several potential avenues. Keeping abreast of the decisions on subsidies allocation can empower investors to make informed decisions about where to invest. It’s also vital to monitor developments with TSMC, Intel, and Samsung, as the success of their factories and chip productions will heavily impact their stock performance.
AI Chips Manufacturing: Present Scenario
TSMC, currently a global leader in AI chips manufacturing, is yet to make a solid commitment to bring its cutting-edge technology to US shores. Despite having major tech clients like Nvidia, Advanced Micro Devices, Microsoft, and Alphabet’s Google, TSMC is not expected to bring its 3-nanometer manufacturing technology to the US until 2027-28.
American Manufacturing: Intel vs. TSMC vs. Samsung
Currently, Intel has indicated its plans of deploying its most advanced manufacturing, the “18A” and “14A”, in the US. However, this move comes with its challenges. Majorly, it entails the restructuring of Intel’s business model into a more service-oriented one, serving outside customers while simultaneously attempting to regain the manufacturing lead from TSMC. The bottom line for Intel, as per Dan Hutcheson, vice chair at analyst firm TechInsights, is to execute. “The whole foundry business is a good year or two away before they either make it or break it.”
Outlook of AI Chips
An Intel spokesperson expressed the company’s confidence in its “18A” process, which it expects to be ready for manufacturing in the second half of this year. However, should Intel fail to regain its footing, the balance may shift towards the Taiwan-based TSMC or Samsung, which is already establishing its factory in Taylor, Texas. Regardless, the future of AI chips, with their key role in powering innovation and critical defense systems, hangs in the balance.
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