CHIPS Act funding to open as US plans semiconductor manufacturing clusters

Dive Brief:

The U.S. will open its first round of applications for CHIPS and Science Act funding for manufacturing facilities next week, Commerce Sec. Gina Raimondo said during a speech at Georgetown University on Thursday.

The pot of $39 billion in federal funding is meant to incentivize semiconductor manufacturers to build sites in the U.S., Raimondo said. More funding will be released for supply chain and R&D operations in the coming months.

Such money is part of a broader plan the secretary mentioned to build two large-scale clusters of semiconductor fabs by 2030. Each cluster will include a surrounding supplier ecosystem, R&D facilities and specialized infrastructure.

Dive Insight:

Signed by President Joe Biden in August, the CHIPS and Science Act sets aside over $50 billion to boost U.S. semiconductor manufacturing, R&D and workforce development.

Now, the Commerce Department is working to deploy that money. Earlier this month, the department released an expected timeline on funding opportunities and application processes.

In addition to the applications set to open next week, later this spring the Commerce Department will announce funding focusing on material suppliers and equipment manufacturers. In early fall, the agency will announce a funding opportunity to support the construction of semiconductor R&D facilities.

“While I’ve focused on manufacturing, our success will be short-lived if we focus only on manufacturing,” Raimondo said in her remarks. “The $39 billion in incentives will bring semiconductor manufacturing back to the U.S., but a robust R&D ecosystem will keep it here.”

The secretary highlighted $11 billion from the CHIPS Act that will be used to strengthen the country’s semiconductor R&D ecosystem and create the National Semiconductor Technology Center.

“The NSTC will be an ambitious public-private partnership where government, industry, customers, suppliers, educational institutions, entrepreneurs, and investors converge to innovate, connect, and solve problems,” Raimondo said. “We envision a network of several centers around the country, solving the most impactful, relevant and universal R&D challenges in the industry.”

Several semiconductor manufacturers have announced new facilities or expansions within the U.S. since the CHIPS Act was enacted last year. Semiconductor manufacturer Applied Materials recently announced a multi-billion dollar plan to increase its manufacturing capacity and build a new R&D facility in Sunnyvale, California.

Dallas-based Texas Instruments similarly announced plans to invest $11 billion to extend its semiconductor wafer fabrication plant in Lehi, Utah, last week.

Finally, Micron Technologies broke ground on an Idaho memory fabrication plant in October