It has been two years since President Joe Biden signed into law the CHIPS and Science Act. Over the last 24 months, the U.S. Department of Commerce has worked to bolster the domestic American semiconductor supply chain with more than $30 billion in direct funding to chipmakers.
Since the outbreak of COVID-19 showed how flawed the aggregation of the semiconductor supply chain is when battling a global event, lawmakers, chipmakers and trade organizations in the U.S. pushed the government to regain a foothold in the semiconductor manufacturing sector.
The hope is if something like this happens again, or any other conflict or global event, not only will the supply chain be more resilient, but U.S. national security interests will remain intact with regional manufacturing. Additionally, the boon financially of making semiconductors domestically — from job creation to increased private investments — will help the country’s bottom line.
According to the Semiconductor Industry Association (SIA), since the CHIPS Act inception, over 80 new projects across 25 U.S. states have been announced by those in the semiconductor ecosystem. This totals about $450 billion in private investments. These projects will also create more than 56,000 direct jobs and support thousands of additional jobs in the economy.
The CHIPS Act has reached preliminary agreements with 15 companies for 23 projects in 15 states.
Mega investments
The biggest beneficiaries of the CHIPS Act so far, not surprisingly, are the major foundry vendors that are either expanding operations domestically in America or building completely new fabs from scratch. The idea is that if the supply chain is located regionally in the U.S. and a geopolitical event in Taiwan or Korea happens or export restrictions continue to hamper relations with China, semiconductors will still be able to flow to American interests.
Of these mega investments, Intel garnered the largest direct funding with $8.5 billion. This will help the company:
- Build two fabs in Arizona
- Build two fabs in Ohio
- Expand its New Mexico packaging operations
- Expand its Oregon fab
Intel Foundry, the chipmaking arm of the company, is seeking to compete at a high level with Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics, both of whom are seen as the largest and most advanced semiconductor foundries in the world.
Speaking of TSMC, it also received $6.6 billion in funding through the CHIPS Act to help with the final construction of two fabs in Arizona as well as to begin construction on a third fab at the location in what TSMC claims is the largest foreign direct investment in the state’s history as well as the largest foreign direct investment in a greenfield project in U.S. history.
The three fabs will create about 6,000 direct jobs as well as 20,000 accumulated construction jobs and tens of thousands of indirect supplier and consumer jobs.
Samsung Electronics is also receiving CHIPS Act direct funding to the tune of $6.4 billion to help it complete construction of its Tyler, Texas, facility. Samsung said it will invest more than $40 billion in the coming years that will help create 20,000 jobs. This may include the construction of other fabs in Texas, but the company has yet to announce any plans.
Micron Technology also received $6.14 billion in funding to help it construct memory manufacturing fabs in Boise, Idaho, and in Clay, New York. Micron said it will invest about $50 billion in gross capital expenditure for U.S. domestic memory manufacturing through 2030.
Pure play foundry GlobalFoundries was one of the first beneficiaries of the CHIPS Act with $1.5 billion to support three projects: expansion of its Malta, New York, Fab; the construction of a new fab at the Malta campus; and upgrades to its Essex Junction, Vermont, facility for wide bandgap technologies.
Smaller vendors
Large chipmakers were not the only companies to get CHIPS Act funding. Smaller foundries and semiconductor vendors also have received about $1.2 billion in funding.
Smaller chipmakers also receiving funding includes the first recipient of direct funding from the CHIPS Act BAE Systems with $35 million to expand military and aerospace semiconductors. This was followed by Microchip Technology investment of $162 million to increase microcontroller manufacturing for automotive, industrial and defense sectors.
Polar Semiconductor received $120 million from the CHIPS Act to transform the company into a U.S.-based chip foundry. Rad-hard semiconductor vendor Rocket Lab received $23.9 million from the CHIPS Act while Entegris received $75 million in direct funding to support the construction of a new facility to support advanced materials handling and micro-contamination control divisions.
Other foundries that received funding include Rogue Valley Microdevices with $6.7 million to build what it claims is the first microelectromechanical systems (MEMS) and sensor fab with a 300 mm wafer capability. GlobalWafers also received $400 million to expand production of silicon-on-insulator wafers. Finally, Amkor Technology just last month received $400 million to help in the construction of its $2 billion advanced packaging test facility in Peoria, Arizona.
R&D and tech hubs
“As progress on manufacturing projects continues, we must also fortify this foundation with the essential research and development needed to fill fabs. R&D is the lifeblood of the semiconductor industry, and investments in this area will deliver step-function gains that benefit the entire ecosystem to overcome unprecedented design and manufacturing complexity, as well as foster the next-generation of innovators,” said Sassine Ghazi, president and CEO of Synopsys.
The good news is that the CHIPS Act is providing funding for these areas with about $1.6 billion in funding for R&D initiatives. These five R&D areas fall under the U.S. DOC’s National Advanced Packaging Manufacturing program:
- Equipment, tools, processes and process integration
- Power delivery and thermal management
- Connector technology, including photonics and radio frequency (RF)
- Chiplets ecosystem
- Co-design/electronic design automation (EDA)
In addition, the CHIPS Act is helping to open 43 tech hubs across the U.S. that are designed to create jobs, increase R&D and manufacture, and commercialize and deploy technology to advance America’s scientific competitiveness. The hubs will be deployed across 32 states and Puerto Rico in both urban and rural regions.
What’s next?
There will likely be further funding events in the future as the rest of the $52 billion in the law is doled out. Likely to see more funding are companies both big and small as well as more tech hubs and R&D efforts.
At this year’s Intel Direct Connect in February, Pat Gelsinger had a chat with U.S. Secretary of Commerce Gina M. Raimondo on the future of the CHIPS Act. Raimondo said that another CHIPS Act may be necessary to continue supply chain diversification and reach a goal of one-third of all semiconductor manufacturing taking place in the U.S.
Raimondo said that while there may not be a second CHIPS Act, something more may be needed to continue the momentum already gained from the law.
