The recent CHIPS Act signed into law by President Joe Biden in an effort to boost domestic semiconductor manufacturing and reduce reliance on overseas manufacturers is likely to open up investment opportunities for private equity firms. The act is expected to channel roughly $280 billion over the next decade into domestic semiconductor science and production, including $52 billion targeted at manufacturing and $200 billion for research. It creates a 25% tax credit for investment in advanced chipmaking facilities.
Investments, such as the $30 billion joint agreement between Intel Corp. and Brookfield Asset Management have driven private equity and venture capital investment in semiconductors globally to its highest level since 2016 according to Market Intelligence Data.
S&P Global Market Intelligence interviewed TBM’s CEO, John Ferguson, to share his views on what this act means for small and large private equity firms and how onshoring will impact investment risk for semiconductor manufacturing and chip suppliers.