If you examine the history of just about any town or city, there has been grants or incentives for the largest employer to locate in the community, it could have just happened but it was likely the result of the City officials, the Mayor, the State Representative, Senator to offer incentives to the employer to locate in the community. All of them believed the long-term effects of the employer – whether it was a manufacturing company or educational institution or government facility was good for the community. The same line of thinking happens with pro sports facilities, there seems to be a government grant needed.

In an article by Alexandra Alpher and David Shepardson of Reuters, the Biden Administration passed the 2022 Chips and Science Act to boost semi-conductor output with $52.7 billion in funding including $39 billion in subsidies for semi-conductor production and $11 billion for research and development.

Intel received nearly $20 of the $52.7 billion which it is using to build 2 new factories and modernize an existing plant in the Phoenix, Arizona area. Intel also has a plant under construction in the Columbus, Ohio area and does research and development in the Oregan area.

According to the Semiconductor Industry Association, the share of global semiconductor manufacturing capacity in the US had fallen from 37% in 1990 to 12% in 2020. The big winner has been Taiwan.

Other companies receiving grants include: GlobalFoundries $1.5 billion to build a semi-conductor chipmaker in Malta, NY. GlobalFoundries is the 3rd largest contract chipmaker.

Awards for Samsung and Taiwan’s TSMC are expected to be announced soon.

Linking to dividend paying stocks, when manufacturing companies decide to enhance their capacity, there is a tremendous opportunity to take advantage of grants for most counties and states in the country. There maybe a few which are not involved, but very few. The reality is most locations have a grant attached to them somewhere, whether to stay where they are or expand existing facilities. If the companies you invest in do not take advantage of grants and subsidies, they are often leaving a competitive advantage on the table, is that good?

There are more questions than answers, till the next time – to raising questions.