The value of support is less than the $37 billion that was being asked for by the Semiconductor Industry Association (see US semiconductor industry seeks $37 billion government boost). Nonetheless, the SIA has applauded the introduction of the Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS for America Act), saying the act would invest tens of billions of dollars over the next five to 10 years to strengthen and sustain American leadership in chip technology.

The move reflects a recognition within the government that, like China, the US is reliant on leading-edge chips made in Taiwan. While that has allowed the US to exert pressure on Chinese communications equipment maker Huawei (see US tightens restrictions on Huawei’s chip supply) it is also an Achilles heel for the US.

The money under CHIPS for America is earmarked to support the building of wafer fabs in the US and buying chipmaking equipment to put in them, as well as sponsoring research The possibility of the funding initiative was evident in discussions recently held with leading chipmakers about building wafer fabs in the US (see US talks to Intel, TSMC about building local foundry fabs).

The money would be an aggregate of state and federal funding over a five-year period and that funding could in part come in the form of matching funds. About $10 billion could be within a federal grant program that would incentivize new domestic semiconductor manufacturing facilities. However, with the cost of a leading-edge wafer fab now reaching the order of $15 billion, the US funds may not go far.

Next: Urgency

“This is pretty urgent. We’ve seen how vulnerable we are,” Bloomberg quotes Senator John Cornyn of Texas, as saying. “And obviously, you have to take the first step. This is going to be a multiyear project.”

“Semiconductors were invented in America and US companies still lead the world in chip technology today, but as a result of substantial government investments from global competitors, the US today accounts for only 12 percent of global semiconductor manufacturing capacity,” said Keith Jackson, CEO of On Semiconductor, in a statement issued by the SIA. “The CHIPS for America Act would help our country rise to this challenge, invest in semiconductor manufacturing and research, and remain the world leader in chip technology, which is strategically important to our economy and national security,” he said.

The CHIPS for America Act would make federal investments into the Department of Defense, the National Science Foundation, and the Department of Energy to promote semiconductor research. The bill would also establish a National Semiconductor Technology Center to conduct research and prototyping of advanced chips, as well as create a center for advanced semiconductor packaging.

“As global competitors invest big to attract advanced semiconductor manufacturing to their shores, the US must get in the game and make our country a more competitive place to produce this strategically important technology,” said John Neuffer, CEO of the SIA.

Related links and articles:

News articles:

US semiconductor industry seeks $37 billion government boost

US talks to Intel, TSMC about building local foundry fabs

Intel fail foreseen: ARM reportedly wins Mac computer processor design-ins

US tightens restrictions on Huawei’s chip supply

TSMC dragged to the altar of US manufacturing

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