US to inject US$50 billion into making CHIPS locally

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Chips
Chips

The US government has earmarked an initial US$50 billion to be injected specifically into making chips and semiconductors at home.

This is contained in a recently passed the country’s CHIPS and Science Act of 2022, which was initially criticized by US lawmakers because they did not understand precisely where the money would go.

But detailing some of those plans, the US Department of Commerce (DoC) stated that $50 billion of that funding will be focused on getting the U.S. back on track with domestic semiconductor production to build a back-stock of chips and create jobs.

To be eligible for a piece of the funding, the DoC said a company must — naturally — produce its chips in the States; and that includes constructing and operating those factories here.

Again, an eligible applicant for funding under the Section 9902 incentives program must be a “covered entity,” which can be a private entity, a non-profit entity, a consortium of private entities, or a consortium of non-profit, public, and private entities with a demonstrated ability to substantially finance, construct, expand, or modernize a facility relating to fabrication, assembly, testing, advanced packaging, production, or research and development of semiconductors, materials used to manufacture semiconductors, or semiconductor manufacturing equipment.

Specifically, $39 billion will go toward building out domestic manufacturing, $28 billion of which will arrive as incentives for manufacturers to design next-gen chips, with $10 million focused on existing chips. Separately, $11 billion is focused on R&D programs. That includes the establishment of the National Semiconductor Technology Center (NSTC), which it describes as a “public-private entity.” It brings together companies, the Department of Defense, the Department of Energy and the National Science Foundation to design and prototype chips.

“The funding provided by the CHIPS Act of 2022 for the NSTC should be viewed as seed capital,” the report notes. “The Department envisions an organization that grows over time to be a significant force for advancing innovation in semiconductors and microelectronics, with substantial financial and programmatic support from companies, universities, investors, and other government agencies, including those at the state and local levels.”

Says U.S. Secretary of Commerce, Gina Raimondo, “Rebuilding America’s leadership in the semiconductor industry is a down payment on our future as a global leader. CHIPS for America will ensure continued U.S. leadership in the industries that underpin our national security and economic competitiveness. Under President Biden’s leadership, we are once again making things in America, revitalizing our manufacturing industry after decades of disinvestment and making the investments we need to lead the world in technology and innovation.”

Additional funding documents will be released in February.

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