[News] Nearly 40% of Major Manufacturing Projects Reportedly Face Delays under U.S. IRA and CHIPS Act

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In August 2022, U.S. President Joe Biden signed the “Inflation Reduction Act” and the “CHIPS and Science Act,” providing over USD 400 billion in tax incentives, loans, and grants. However, according to a report from Financial Times, about 40% of the investment projects under these acts have been delayed or put on hold.

In the first year after these laws were implemented, companies announced investment projects totaling USD 220 billion. However, among these projects, around USD 84 billion of investment has now been delayed by anywhere from two months to several years, with some even being indefinitely postponed.

Notably, TSMC has delayed the mass production schedule for its second plant in Arizona by two years. The foundry giant’s local suppliers, such as Chang Chun Group, have also postponed a USD 300 million factory investment project by two years, while KPCT Advanced Chemicals has put its USD 200 million project on hold as well.

Other major investment projects that have been put on hold include LG Energy Solution’s USD 2.3 billion battery storage facility in Arizona, Italy’s Enel’s USD 1 billion solar panel plant in Oklahoma, and Albemarle’s USD 1.3 billion lithium refining plant in South Carolina.

Industry sources cited by the report reveal that the uncertainty of policies during the election year, coupled with deteriorating market conditions and slowing demand, has led the companies to alter their plans.

Specifically, the slow approval process for CHIPS Act funding and unclear rules for the Inflation Reduction Act have also hinted at delays in some investment projects.

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(Photo credit: TSMC)