STMicroelectronics has reportedly announced new plans to partner with Chinese foundry Hua Hong, arguing that having local manufacturing in China is vital to its competitive position as a supplier to the Chinese electric vehicle manufacturers. This undoubtedly legitimate strategy highlights the intricacies inherent in transitioning from the interdependencies of yesterday’s globalization to the current era of geopolitics-driven subsidies and tariffs. It’s worth noting that Europe-headquartered STMicroelectronics will receive a 2 billion euros State subsidy to build a silicon carbide facility in Italy; and that the Chinese electric vehicles imported into Europe are currently subject to EU tariffs.
U.S. CHIPS Act awards: Intel, BAE Systems, Rocket Lab
The U.S. Department of Commerce has awarded Intel up to $7.865 billion in direct funding under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities. The award follows the previously signed preliminary memorandum of terms, announced on March 20, 2024. This funding will directly support Intel’s expected U.S. investment of nearly $90 billion by the end of the decade. As noted by Reuters, the amount is lower than the $8.5 billion announced in March, after Intel won a separate $3 billion award from the Pentagon. Reportedly, Intel has already met some initial project milestones and will receive at least $1 billion of the CHIPS award before the end of December.
Two other CHIPS Act awards were recently finalized by the U.S. Department of Commerce, both of them to defense/aerospace suppliers. BAE Systems Electronic Systems will receive up to $35.5 million in direct funding, to support the modernization of the company’s Microelectronics Center in Nashua, New Hampshire, and quadruple its production capacity for Monolithic Microwave Integrated Circuits. Rocket Lab, the parent company of SolAero Technologies, will receive up to $23.9 million in direct funding to support the modernization and expansion of the company’s facility in Albuquerque, New Mexico, which will increase the company’s compound semiconductor production by 50% within the next three years. Rocket Lab is one of two companies in the United States that specialize in the production of space-grade solar cells that power spacecrafts and satellites.
