CHIPS Bill Almost Signed and Semiconductors Need Helium
US politicians in Taiwan, hundreds of billions in funding for chip manufacturing and one strategic gas.
US House of Representatives Speaker Nancy Pelosi has just left Taiwan and the US$280B Chips and Science Act is heading to President Joe Biden’s desk shortly - the semiconductor supply chain is now mainstream news.
Taiwan retains a dominant position in the chip making industry and the US is keen to attract more chip manufacturing for strategic reasons with the US$280B Chips and Science Act.
Importantly, semiconductor manufacturing is expected to make up 28% of helium demand in the next 5 years.
We’ve previously drawn a link between our helium Investment, Grand Gulf Energy (ASX:GGE), and the large number of proposed manufacturing hubs or “fabs” which could be built in neighbouring states to GGE’s operations in Utah, USA.
In short, we expect domestic helium supply to continue to increase in strategic significance as chip makers start to build out US-based manufacturing capacity.
We also expect helium demand to remain very firm in the short to medium term, and market interest in helium investments to increase in the years to come on the back of its role in the semiconductor supply chain.
Just as the move to secure domestic semiconductor supply chains gathers momentum, securing the helium supply chain will correspondingly also become important.
Recently, the US House of Representatives’ passed the Chips and Science Act which will allocate $52B in grants and incentives for domestic semiconductor manufacturing:
- US$52.7 billion allocated in order to encourage chip makers to develop and research semiconductors and chips in the U.S
- President Biden to sign in the coming days
- Part of a broader trend of Western governments incentivising chip production - Germany has announced it will fund 32 semiconductor projects via a €10B fund proposed in May. Meanwhile Japan has also approved US$6.8B in funding for domestic semiconductor investment
What’s next for GGE?
GGE will re-enter Jesse #1A to test for flow rates in Q3-2022. If GGE can prove out a commercially viable flow rate then it could see itself go from helium explorer to producer off the back of its maiden drilling program.