Top microchip makers are postponing their expansion into the U.S. and setting up shop in Israel and Russia due to equity caveats that are required for them to receive grants from the U.S. government.
The Biden administration promised earlier this year that they would be handing out $39 billion in grants to encourage semiconductor manufacturing in the U.S.
Shortly after the announcement however, Intel announced they would be holding off on their Columbus factory, while Samsung also delayed their facility in Texas.
Despite the billions in subsidies, two experts believe the tech companies' decision to back out of building manufacturing facilities in the U.S. stems from the diversity, equity and inclusion policy.
In an opinion piece for The Hill, CEO of Strive Asset Management Matt Cole and head of research at the company, Chris Nicholson, say the subsidies are so 'loaded with DEI that it can't move.'
The pair say that Intel has now built manufacturing plants in Poland and Israel, meaning they would rather deal with the threat of Hamas rockets and Russian aggression than the government's DEI regime.
While Samsung is pivoting toward making South Korea the home of its semiconductor manufacturing plant.
The Taiwan Semiconductor Manufacturing Company (TSMC) has also pushed back production of a second facility in Arizona.
The subsidies are paid for by the CHIPS and Science Act, a $280 billion bill to fund domestic semiconductor chip manufacturing and boost competitiveness with China.
The package includes $52 billion in funding for U.S. companies to produce computer chips as well as a 25 percent tax credit for companies who invest in the market.
It includes $39 billion for chip manufacturing companies to expand and modernize their technologies.
The act also authorized $11 billion to be given to the Commerce Department for research and development and another $81 billion for the National Science Foundation.
In their piece, Cole and Nicholson said that part of the CHIPS money calls for the creation of Chief Diversity Officers and helping minority groups.
It also calls on chipmakers to 'increase the participation of economically disadvantaged individuals in the semiconductor workforce.'
The two added: 'In short, the world’s best chipmakers are tired of being pawns in the CHIPS Act’s political games.
'They’ve quietly given up on America. Intel must know the coming grants are election-year stunts — mere statements of intent that will not be followed up.
'Even after due diligence and final agreements, the funds will only be released in dribs and drabs as recipients prove they’re jumping through the appropriate hoops.'
They also added that chipmakers have to make sure they are hiring female construction workers at the firms.
In a 2023 report from the Bureau of Labor, they said that 10.8 percent of construction workers in the US are women.
Despite the small numbers, companies must ensure they have childcare for the workers and engineers who, according to the two, 'don't exist yet.'
They add: 'This is the stuff declining empires are made of. As America pursues national security by building a diverse workforce, China does it by building warships.
'Instead of solving the problem, the people in charge are trying to cover the problem up just long enough to win reelection.
'Don’t be fooled by the Biden administration’s upcoming weekend-at-Bernie’s act — the CHIPS Act is dead.'
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