The U.S. Senate earlier this week had voted to move ahead with a new version of legislation to provide billions of dollars in subsidies and tax credits for the semiconductor industry in an attempt to ease a supply shortage that has disrupted the market from automobiles to electronics as well as high-tech weapons.
The legislation will be passed to the Senate and House of Representatives by the end of next week for approval.
According to the Senate aides as reported by Reuters, the measure includes about $54 billion in subsidies for U.S. semiconductor companies and also a four-year 25% tax credit to encourage companies to build plants in the United States. The tax credit is estimated to be worth about $24 billion.
The measure could be the start of policy risks for semiconductor producers at a global scale, giving newly established plants in the U.S. an edge to other players in the global market in terms of cost production with this attractive tax credit.
KCE Electronics Public Company Limited (SET: KCE), Hana Microelectronics Public Company Limited (SET: HANA) and Delta Electronics (Thailand) Public Company Limited (SET: DELTA) are leading chip producers and exporters in Thailand that have revenue contribution direct and indirect from the U.S.
In 2021, over 21% of KCE’s total sales revenue was contributed by its business with the U.S.
Hana Technologies Inc (HTI) in the U.S. only had a 4% contribution to the company’s total sales revenue, but made a remarkable growth of 37% in 2021.
Meanwhile, 35% of DELTA’s total sales revenue in 2021 came from North America.
The measure if passed by the Congress might not reflect an immediate impact on global players, but the sentiment to the market outside the U.S. surely does not look well.
