Why is the US about to give away $52bn to corporations like Intel?
Congress will soon put final touches on the Chips Act, which will provide more than $52bn to companies that design and make semiconductor chips.
The subsidy is demanded by the biggest chipmakers as a condition for making more chips in America.
It’s pure extortion.
The world’s biggest chipmaker (in terms of sales) is already an American corporation – Intel, based in Santa Clara, California.
Intel hardly needs the money. Its revenue rose to $79bn last year. Its chief executive, Pat Gelsinger, got a total compensation package of $179m (which was 1,711 times larger than the average Intel employee).
Intel designs, assembles, and tests its chips in China, Israel, Ireland, Malaysia, Costa Rica, and Vietnam, as well as in the US.
The problem for the US is Intel is not helping America cope with its current shortage of chips by giving preference to producers in the United States. And it’s not keeping America on the cutting edge of new chip technologies.
Obviously, Intel would like some of the $52bn Congress is about to throw at the semiconductor chip industry. But why exactly should Intel get the money?
Among the other likely beneficiaries of the Chips Act will be GlobalFoundries, which currently makes chips in New York and Vermont – but in many other places around the world as well.
GlobalFoundries isn’t even an American corporation. It’s a wholly owned subsidiary of Mubadala Investment Co.,the sovereign wealth fund of the United Arab Emirates.
The nation where a chipmaker (or any other high-tech global corporation) is headquartered has less and less to do with where it designs and makesthings.
Which explains why every industry that can possibly be considered “critical” is now lobbying governments for subsidies, tax cuts, and regulatory
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