IBM: Hey Joe, We Make Chips, Too. How About Some Of 'em Subsidies?

President Joe Biden popped by IBM's latest chipmaking venture this week as Big Blue clearly hopes to keep the White House close and bag a slice of those government semiconductor manufacturing subsidies.

The American leader had been invited to the IT giant's campus in Poughkeepsie, New York, where he unveiled a $20 billion expansion to the corporation's facilities in the US state. IBM said this spending will be used to speed up development of next-gen mainframes, quantum computers, and semiconductor design and manufacturing tech.

Big Blue operates a number of sites in New York's Hudson Valley. Poughkeepsie is home to IBM's mainframe manufacturing and quantum computing research center, while the biz operates a research fab in Albany.

It's clear IBM hopes to offset much of its investment with government subsidies and tax breaks potentially afforded by the $280 billion CHIPS and Science Act signed into law this summer.

In addition to $39 billion in manufacturing subsidies and another $24 billion in tax incentives to support domestic semiconductor expansion, the bulk of the legislation — $170 billion — is intended to fund research and development in American facilities.

"As we tackle large-scale technological challenges in climate, energy, transportation, and more, we must continue to invest in innovation and discovery – because advanced technologies are key to solving these problems and driving economic prosperity including better jobs, for millions of Americans," IBM CEO Arvind Krishna, said in a canned statement.

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IBM says its $20 billion investment will support the development and application of quantum computing tech by businesses and scientific researchers. Meanwhile, in Albany, IBM plans to expand its semiconductor research facility to support the National Semiconductor Technology Center (NSTC) established by the CHIPS legislation.

The computing giant arguably no longer receives the attention enjoyed by Intel, AMD, and Nvidia, yet Big Blue remains invested in semiconductor development. IBM's Power9 processors are at the heart of the Summit and Sierra supercomputers at America's Oak Ridge and Los Alamos National Laboratories. Meanwhile, IBM's Z-series processors power its latest mainframe machines employed by some of the largest financial institutions around the world for high-speed, redundant transactional processing.

That said, IBM doesn't just design chips for use in its servers and mainframes: it's also engaged in developing next-gen process tech at its Albany facility. Last year, the company showed off a 2nm process node using a gate-all-around transistor design that it developed in collaboration with Samsung.

IBM was also one of the first organizations Pat Gelsinger tapped to help get Intel's process tech back on track after taking over as CEO in early 2021.

However, it remains to be seen how large a piece of the CHIPS funding IBM will claim. Since the bill's passage, semiconductor manufacturing and packaging projects have grown considerably in the United States in anticipation of these financial breaks. Intel, Samsung, TSMC, SK Group, and others plan to build facilities on American soil.

Just today, US memory manufacturer Micron announced a $100 billion foundry project also destined for the Empire State.

However, we'll have to wait to learn just how much taxpayer money IBM, Micron, and others expect to walk away with until sometime after February when the US Dept of Commerce officially begins soliciting applications for funding. ®