Daily: Trump tax bill and chips; Intel's 18A; China chip startups
6 min read.
Highlights
Trump tax bill and chips. The version of Trump’s ‘One Big Beautiful Bill’ that passed the Senate today contains a tax credit of 35% for semiconductor fabs that break ground by 2026. It’s an upgrade from the current 25% as well as the 30% that was floated earlier. For all the flak that the CHIPS Act has gotten, the Trump admin seems to be doubling down on many of its core pillars.
Intel’s 18A. Intel is reportedly considering a shift away from its cutting-edge 18A manufacturing process. It is primarily used for Intel’s in-house AI chips, with very few external customers. That would mark a big strategic shift for the United States, as Intel is the last domestic company that can produce the latest chips. Taiwan’s TSMC and Korea’s Samsung may be the last remaining two, though both have advanced node plants on U.S. soil.
China chip startups. China meanwhile barrels ahead with its domestic chip companies, with two AI chip design startups, Moore Threads and MetaX, set to IPO on the Shanghai Stock Exchange.
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1. Policy and Geopolitics
1.1
Bloomberg (07/02): Chipmakers Win Bigger Tax Credit Under Bill Passed by Senate
Sweeping tax legislation passed by the Senate Tuesday would make it cheaper for semiconductor manufacturers to build plants in the US, delivering a win to chipmakers and boosting US efforts to expand the industry domestically.
Companies such as Intel Corp., Taiwan Semiconductor Manufacturing Co. and Micron Technology Inc. will be eligible for an investment tax credit of 35% if they break ground on new plants before an existing 2026 deadline. That’s a jump from the existing 25% and tops an increase to 30% envisioned in a draft proposal.
The semiconductor manufacturing provision was tucked into a nearly 900-page bill that represents the heart of President Donald Trump’s economic agenda.
1.2
TrendForce (07/02): U.S., Japan Lead Government-Backed EUV Push as South Korea Reportedly Lags
According to South Korean media outlet ETNews, both the U.S. and Japan are actively working to introduce extreme ultraviolet (EUV) lithography equipment into public-private research institutes through government-led initiatives. In contrast, South Korea’s government-driven efforts in this area remain behind those of the U.S. and Japan, the report suggests.
The report, citing industry sources, states that the U.S. National Semiconductor Technology Center (NSTC) has completed installation of EUV lithography equipment at the Albany Nanotech Complex in New York and plans to begin offering services to companies since July 2025. It also notes that NSTC is reportedly preparing to introduce a High-NA EUV machine in 2026—an advanced tool essential for semiconductor processes at 2nm and below.
The Japanese government is building an R&D facility equipped with EUV lithography tools at the National Institute of Advanced Industrial Science and Technology (AIST), with operations targeted to begin in 2027, as the report points out.
Meanwhile, the report notes that South Korea announced plans two years ago to establish a “Korean version of imec” with advanced facilities, but the project has since been put on hold.
1.3
Bloomberg (07/02): SoftBank’s Ampere Deal Faces In-Depth US Probe in Threat to AI Ambitions
SoftBank Group Corp.’s $6.5 billion acquisition of semiconductor designer Ampere Computing LLC is facing a potentially lengthy probe by the US government.
The Federal Trade Commission, one of two regulators charged with reviewing deals, has opened an in-depth investigation of the takeover, known formally as a second request for information about the transaction, according to people familiar with the matter who asked not to be identified because it isn’t public yet.
Only a small portion of deals face such follow-up requests. In some instances, investigations can last for a year or more and are a precursor to a lawsuit to block the deal.
2. Economy, Finance, and Business
2.1
Reuters (07/02): Intel's new CEO explores big shift in chip manufacturing business
Intel's new chief executive is exploring a big change to its contract manufacturing business to win major customers, two people familiar with the matter told Reuters, in a potentially expensive shift from his predecessor's plans.
If implemented, the new strategy for what Intel calls its "foundry" business would entail no longer marketing certain chipmaking technology, which the company had long developed, to external customers, the people said.
Since taking the company's helm in March, CEO Lip-Bu Tan has moved fast to cut costs and find a new path to revive the ailing U.S. chipmaker. By June, he started voicing that a manufacturing process that prior CEO Pat Gelsinger bet heavily on, known as 18A, was losing its appeal to new customers, said the sources, who spoke on condition of anonymity.
2.2
Reuters (07/01): Two Chinese chip firms plan $1.7 billion IPOs, bet US export curbs to spur growth
Two Chinese artificial intelligence chip startups are seeking to raise a combined 12 billion yuan ($1.65 billion) in initial public offerings, hoping U.S. curbs on advanced chip sales to China will boost local demand for their products, their filings show.
Beijing-based Moore Threads plans to raise 8 billion yuan, while Shanghai-based MetaX seeks 3.9 billion yuan, according to their IPO prospectuses filed on Monday. Both companies intend to list on Shanghai's STAR Market, the tech-focused board of the Shanghai Stock Exchange.
2.3
Korea Times (07/02): Samsung's chip biz eyes rebound with new processes
Samsung Electronics’ chip-making Device Solutions (DS) Division is set to adopt finer manufacturing processes that enable faster and more powerful computing, aiming to secure orders from global big tech firms, raising expectations for a rebound from its prolonged earnings slump.
According to industry officials Wednesday, Samsung Electronics Vice Chairman and DS Division head Jun Young-hyun visited the United States last week and met with his counterparts at global big tech firms, including Nvidia.
Details of his meetings remain unknown, but he reportedly discussed Samsung’s potential supply of high-bandwidth memory (HBM) for artificial intelligence (AI) processors and the company’s foundry capabilities.
2.4
WSJ (07/01): The Tech-Stock Bargains Hiding in Nvidia’s Shadow
Nvidia has reached a nearly $4 trillion valuation by designing and selling artificial-intelligence chips. A handful of lesser-known companies that help make those chips may be better bets for investors.
The largest chip-manufacturing-equipment companies—including Applied Materials and Lam Research—are in a market that is growing fast as AI booms. Capital spending on equipment to make advanced chips like those from Nvidia is expected to nearly double between last year and 2028, according to a recent estimate from industry group SEMI.
With global outlays on equipment set to top $100 billion this year, that’s a lot of revenue to look forward to. Yet investors haven’t given chip-equipment makers the plaudits they have showered on AI chip designers, from Nvidia to Advanced Micro Devices and Broadcom, as well as chip producers like Taiwan Semiconductor Manufacturing.
It has also been hard for investors to ignore how the explosion of AI chip demand has been counterbalanced by a so-so market for a lot of other kinds of chips.
2.5
Bloomberg (07/01): Chip-Design Firm SkyeChip Is Close to a Malaysian IPO, CEO Says
Malaysian semiconductor designer SkyeChip Sdn. is “close” to an initial public offering after posting consecutive years of revenue and profit growth, said Chief Executive Officer Fong Swee Kiang.
The company, founded in 2019, has seen “30% revenue growth every year, and a 30% net profit margin,” Fong said in an interview on the sidelines of a Kuala Lumpur investment conference.
The company is targeting a price that would value it at more than 1 billion ringgit ($239 million), Bloomberg News reported in March.
3. Technology
3.1
TrendForce (07/01): Intel Reportedly Taps SK hynix’s Next-Gen HBM to Power Jaguar Shores in AI Chip Race
Fresh off its inaugural overseas Foundry Direct Connect event in Seoul last week, Intel—keen to sharpen its lead in AI chips—is reportedly teaming up with SK hynix to co-develop next-generation AI accelerators, South Korea’s Newsis reports.
At the Intel AI Summit on July 1, SK hynix VP Jung Woo-seok revealed that the company is collaborating with Intel on integrating HBM into its Gaudi AI accelerator, according to the report.
According to Intel, its 2024-launched Gaudi 3 packs eight HBM2E devices. Notably, to gain ground in the AI chip race, its next Gaudi chip—code-named Jaguar Shores—may adopt SK hynix’s cutting-edge HBM4, as per Newsis.
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