Semiconductor Stock News: Intel, Micron CEOs head to Congress, Qualcomm invests $100 million in metaverse

CEOs of top semiconductor companies Intel and Micron are headed to Capitol Hill to help convince US Senators on big money legislation to help relocate the chip industry back to the US, while Qualcomm has announced a big Metaverse investment. Semiconductor stocks are trying to regain some footing after an underperforming start to 2022.

Intel, Micron Stock News: INTC, MU CEOs request subsidies on Capitol Hill

The CEOs of Intel (INTC) and Micron (MU) will testify before the US Senate's Commerce Committee in a bid to hasten legislation that would give as much as $52 billion in subsidies to semiconductor companies in a bid to onshore semiconductor fabrication. Over the past two decades, computer chip production has been outsourced, especially to Samsung in South Korea and Taiwan Semiconductor (TSM) in Taiwan. Due to the global chip shortage over the past year, it has become clear to US politicians that chip production needs to be boosted in the United States in order to both aid various industries that rely on a steady supply of chips and to protect against geopolitical concerns with China.

Many have called Taiwan Semiconductor the most important company in the world. As US and European countries began to outsource fabrication earlier this century, Taiwan Semiconductor developed the leading edge among other producers and now is the primary supplier of the newest generation of semiconductors smaller than 7 nanometers. Because of China's legacy of ignoring Taiwan's independence, allowing US corporations to rely on a major supplier, there is now of strategic interest to the US government. Both political parties broadly support the CHIPS Act, but the House and Senate have been dithering over various details that regard China directly.

Opening remarks for Intel's CEO Pat Gelsinger have been leaked to Reuters, which quote him: "There is an urgent need for the federal government to incentivize more private sector investment in the United States to enable a resilient and innovative semiconductor ecosystem."

Gelsinger is in the midst of leading a renaissance at Intel, which has seen increasing competition from Advanced Micro Devices (AMD) and Nvidia (NVDA). Now the legacy chip maker is moving back into production with plans to build two giant chip foundries in Ohio. In order to do so, Intel wants plenty of subsidies from the US government. If these two mega foundries work out, Intel says it could construct six more. Micron for its part says it intends to invest $150 billion worldwide in memory chip R&D and manufacturing and wants subsidies such as a refundable tax credit to place those foundries in the US.

Qualcomm Stock News: $100 million earmarked for metaverse

Software company and chipmaker Qualcomm (QCOM) has launched a $100 million fund dedicated to funding startups in the metaverse, especially those dealing with artificial intelligence, augmented reality, and extended reality (XR). Extended reality is when smartphones are paired up with virtual reality headsets. The fund is being dubbed the SnapDragon Metaverse Fund internally, and much of the funds will go toward investments in extended reality projects aimed at the gaming, health, wellness, media, and entertainment segments.

"XR could replace all the other screens in your life, like that big TV in your living room. Mobile XR has the potential to become one of the world’s most ubiquitous and disruptive computing platforms—similar to the smartphone today," the company said in their announcement. Qualcomm's strategy is to break in early with the next big startups in the metaverse ecosystem, so they can persuade them to use their array of hardware and software platforms.

Winners of the grant funding will receive "early access to cutting-edge XR platform technology, hardware kits, a global network of investors, and co-marketing and promotion opportunities.”

Semiconductor Stock Chart: SOX, INTC, MU, AMD, NVDA, QCOM

The chart below compares the Philadelphia Semicondcutor Index (SOX) to major components in its index. On March 23 before the open, SOX is down more than 14% so far this year. Interestingly, INTC is the winner among this group, though it has lost 9% since the start of the year. NVDA, down 12%, also beats the index, while AMD stock is the laggard of this set, having lost nearly 24% thus far.

Semiconductor Daily Stock Chart