Chipmaker Tower Semiconductor is considering setting up a new analog chip plant in the United States. The company, which has seen a significant increase in its revenues in recent years, expects a further increase in demand for its chips also in 2022 and is preparing to increase its production capacity for the coming years.
This trend is well in line with the US administration’s effort to restore some of the chip manufacturing capacity to the United States in order to reduce the dependence of American companies on chip manufacturing in the East. Already in the days of the Trump administration, government officials agreed with the two manufacturing giants TSMC and Samsung on the establishment of advanced chip manufacturing plants on US soil with an investment of tens of billions of dollars. Under the U.S. Senate Innovation and Competitiveness Act passed in June 2021, the U.S. administration intends to allocate $ 250 billion over the next five years to research and technological development in various fields while $ 52 billion of that amount is earmarked for investment in U.S. chip design and manufacturing.
Tower intends to take advantage of the above law to receive benefits and grants from the US administration that will help it obtain the necessary funding to build the plant that costs an estimated $ 5 billion (still much less than digital chip manufacturing plants that can cost between $ 15-25 billion).
Democratic Sen. Charles Schumer of New York State, who was one of the initiators of the law, last week called Russell Olwanger, CEO of Tower, in an attempt to persuade him to set up the company’s new chip plant in upstate New York. Tower is indeed exploring several sites for the establishment of its new plant and a guard has tried to convince Alvanger that New York is the right place given the fact that New York State has the necessary technological manpower and also has supply lines and infrastructure for chip production.
Tower ended the third quarter of 2021 with a 24.7% growth in revenue to $ 387 million, and a 26.6% increase in net profit. The revenue forecast for the fourth quarter is $ 410 million which will bring its total revenue in 2021 to about $ 1.55 billion, compared to $ 1.26 $ 1 billion in 2020. Growth is expected to continue in 2022 as well.
Tower stated that the company is indeed considering setting up a plant in the United States, but no decisions have yet been made on the matter.