American chipmakers are pushing for substantial government subsidies as pressure to end U.S. reliance on China mounts.

The Wall Street Journal reported that the Semiconductor Industry Association, a lobbyist group, is proposing $37 billion in subsidies to support the construction of domestic semiconductor fabs, research funding, and aid for states seeking to woo manufacturers.

The report comes just weeks after the Trump administration entered into talks with Intel and Taiwan Semiconductor Manufacturing Co. (TSMC) to build chip foundries in the U.S.

Less than a week later, TSMC announced plans to build a $12 billion chip fab in Arizona, which would produce upwards of 20,000 silicon wafers a month, using the company's 5-nanometer process. TSMC anticipates the factory will open some time in 2024 and employ north of 1,600 people.

But while Intel has acknowledged that it is working with the U.S. government to explore ways to strengthen domestic manufacturing, the company has yet to disclose any plans for a U.S. fab.

"As the largest U.S.-owned manufacturer of semiconductors, Intel is well positioned to work with the U.S. government to operate a U.S.-owned commercial foundry and supply a broad range of secure microelectronics," the company said in a statement.

Now it appears the question of bringing U.S. chipmakers home may hinge on government assistance.

According to The Wall Street Journal, that aid could come as part of additional coronavirus relief measures, the National Defense Act, or emerging technology bills.

Such action has received bipartisan support among White House officials and members of the Senate.

Both Secretary of Commerce Wilbur Ross and Secretary of State Mike Pompeo have expressed interest in helping U.S. chipmakers bring manufacturing home, The Wall Street Journal report found. In the Senate, Minority Leader Chuck Schumer (D., N.Y.) and Sen. Todd Young (R., Ind.) have proposed $110 billion to bolster technology spending, which includes funding for semiconductor research.

By bringing U.S. chipmakers back to the U.S., the Trump administration says it wants to secure semiconductor supply chains.

However, this may only be half the story, according to a recent report from the Boston Consulting Group, which found that the president appears to be motivated less by a desire to secure U.S. access to vital technologies and instead by efforts to deny China access to U.S. intellectual property.

Shortly after announcing its plans to build a U.S. plant, TSMC halted new orders to China, Nikkei reported last week.

The decision came in response to the U.S. Commerce Department's choice to require all non-U.S. chipmakers using American equipment, intellectual property, or design software to apply for a license to sell chips to Huawei.

While these efforts have been successful in putting Huawei into "survival" mode, they may end up backfiring, the Boston Consulting Group report finds. In fact, Boston Consulting Group analysts argue that continued efforts to restrict access to these technologies would badly damage America's leadership position in the market.

“Over the next three to five years, U.S. companies could lose 8 percentage points of global share and 16% of revenues if the U.S. maintains the restrictions enacted with the current entity list,” the report reads.