Daily: 30% chip tax credit; US signals sanctions; More good news for Samsung's HBM
5 min read.
Highlights
30% chip tax credit. In a confusing turn of events, the Senate has drafted a tax bill that includes a 30% tax credit for semiconductor manufacturing investments made in the United States. This raises the tax credit from the existing level of 25%, as was implemented through the CHIPS Act.
Trump and his administration, such as Commerce Sec. Howard Lutnick, have previously promised to repeal the CHIPS Act, but there has been little appetite for much change on the bipartisan legislation. It’s true that the Act is not as efficient as it probably should be, but especially given the latest news, I suspect there won’t be any major revisions to the core substance of the CHIPS Act’s incentive mechanisms.
U.S. signals sanctions. Continuing on from yesterday’s ‘Is no news bad news?’ segment re: U.S.-China trade talks, the Wall Street Journal revealed today that Commerce Dept officials had considered new export controls on China had the London talks turned sour. The potential restrictions would have encompassed sanctions on chipmaking equipment, leveraging U.S. dominance in the market with American players that include Applied Materials, Lam Research, and KLA.
This news was sourced from an anonymous White House official and the Chinese surely monitor the WSJ, so I think the article could be a White House ploy to signal to the Chinese that the U.S. has more retaliatory tools if the agreement doesn’t go to plan.
More good news for Samsung’s HBM. Off the recent news that Samsung HBMs have been cleared for AMD’s latest AI accelerators, Samsung has now also passed Broadcom’s tests for the use of Samsung’s HBM3Es. Samsung’s HBM3, 3E chips have struggled with delays and low market penetration, so perhaps things are finally turning around.
Thanks for reading.
1. Policy and Geopolitics
1.1
WSJ (06/17): Trump Officials Weighed Broader China Tech Restrictions Ahead of Trade Talks
Commerce Department officials weighed new export limits on critical technology going to China ahead of recent trade talks in London, adding to the Trump administration’s arsenal if tensions between Washington and Beijing escalate again.
The Commerce Department unit overseeing export controls in recent weeks weighed tougher limits on semiconductors, including cutting off sales to China of a wider swath of chip-manufacturing equipment, people familiar with the matter said. Such a move would have covered equipment used to make everyday semiconductors, expanding beyond existing export limits on equipment for producing advanced chips.
The decision could have roiled supply chains for chips needed to make everything from smartphones to cars, while threatening billions of dollars in sales for leading equipment companies such as Applied Materials, Lam Research and KLA.
The restrictions were discussed as an option if trade talks didn’t go well and are no longer actively being considered, a White House official said. The official declined to say whether they might still be an option down the road.
1.2
Bloomberg (06/17): Trump Tax Bill to Boost Biden’s Chip Tax Credit to 30%
The Senate’s draft tax bill calls for increasing an investment credit for semiconductor manufacturers, a potential boon for chipmakers that the Trump administration is urging to increase the size of their US projects.
The measure would increase the tax credit to 30% of investments in plants, up from 25%, giving chipmakers further incentive to break ground on new facilities before an existing 2026 deadline. Companies that start projects by the end of next year can continue to claim credits for continuous construction after that date — a policy that’s designed to get sites up and running while recognizing that chip factories take years to build.
The tax credit, which isn’t capped, was already likely to be costlier than those other forms of subsidies — a function of how much investment the Chips Act has spurred. In almost every case, it will account for the greatest share of Chips Act incentives going to any one company, including those that didn’t win grant awards. Major beneficiaries of the grant program include Intel Corp., Taiwan Semiconductor Manufacturing Co., Samsung Electronics Co. and Micron Technology Inc.
1.3
Nikkei (06/17): China's automakers aim for cars with 100% domestic chips from 2026
Chinese automakers including SAIC Motor, Changan, Great Wall Motor, BYD, Li Auto and Geely, are preparing to launch models equipped with 100% homemade chips, with at least two brands aiming to start mass production as early as 2026, Nikkei Asia has learned.
1.4
Reuters (06/17): Nvidia to attend China supply-chain expo in July for first time, CCTV reports
U.S. chip giant Nvidia will attend a major supply-chain expo in July in Beijing for the first time, Chinese state broadcaster CCTV reported on Tuesday.
The third edition of the China International Supply Chain Expo will be held from July 16 to 20 and will welcome more than 230 new Chinese and foreign participants, CCTV reported.
2. Economy, Finance, and Business
2.1
TechCrunch (06/17): Intel to lay off up to 20% of Intel Foundry workers
The semiconductor giant plans to lay off 15% to 20% of workers in its Intel Foundry division starting in July, according to an internal memo originally reported on by The Oregonian. Intel Foundry designs, manufactures, and packages semiconductors for external clients.
It’s unclear how many workers this will directly impact. Intel’s total workforce was 108,900 people as of December 2024, according to the company’s annual regulatory filing.
3. Technology
3.1
Bloomberg (06/17): China’s MiniMax Says Its New AI Reasoning Model Beats DeepSeek
Chinese AI upstart MiniMax released a new large language model, joining a slew of domestic peers inspired to surpass DeepSeek in the field of reasoning AI.
The Shanghai-based company touted the efficiency of its new MiniMax-M1 model in handling complicated productivity tasks, claiming it outdoes all closed-source competitors from China in a statement. In several benchmarks presented by MiniMax, M1 also scored higher than DeepSeek’s latest R1-0528 model.
The company used large-scale reinforcement learning to train M1, employing 512 Nvidia Corp. H800 GPUs with a rental cost of $534,700, according to the statement.
3.2
TrendForce (06/17): Samsung Reportedly Clears Broadcom’s HBM3E 8-Hi Prototype Test; NVIDIA 12-Hi Still Pending
According to FETV, Samsung has reportedly passed Broadcom’s qualification test for its HBM3E 8-Hi prototype, raising the prospect of rejoining the supply chain. Multiple testing equipment sources cited in the report indicate that its improved 8-Hi product has successfully passed the verification, completing the pre-mass production evaluation stage.
The report notes that for fabless companies like Broadcom, diversifying the supply chain is a strategic way to mitigate risk. With the current heavy reliance on SK hynix, Samsung’s potential return to the supply chain is seen as a viable option to enhance pricing flexibility and supply resilience.
3.3
TrendForce (06/17): Huawei’s Quad-Chiplet 910D Reportedly Takes Shape with Advanced Packaging to Challenge NVIDIA
Backed by founder Ren Zhengfei’s belief that advanced packaging and stacking can keep China in the advanced chip race, Huawei has reportedly filed a patent for a quad-chiplet design—likely linked to its next-gen AI chip, the Ascend 910D, per Tom’s Hardware.
The report suggests that it could spell trouble for NVIDIA, as the layout echoes its quad-die Rubin Ultra. In addition, the move implies Huawei’s push into advanced packaging, which might aim to rival TSMC’s and help it bypass U.S. sanctions, the report adds.
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