US CHIPS Act sees $166bn of semiconductor investments

US CHIPS Act sees $166bn of semiconductor investments

Business news |
By Nick Flaherty

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The US CHIPS and Science Act has seen $166bn of investments in semiconductors and electronics in its first year, says the US government.

The CHIPS Act provides nearly $53bn in incentives for semiconductor manufacturing, research and development, and workforce development in the US as well as a 25 percent tax credit for capital investments in semiconductor manufacturing.

The $166bn in manufacturing in semiconductors and electronics is supported by at least 50 community colleges in 19 states that have announced new or expanded programming to help American workers access good-paying jobs in the semiconductor industry.

The Department of Commerce last week announced the first round of grants under CHIPS to support the development of open and interoperable wireless networks, and the National Science Foundation and Departments of Energy, Commerce, and Defense announced progress toward establishing the National Semiconductor Technology Centre.

The Department of Commerce launched the first funding opportunity for the $39bn in semiconductor manufacturing incentives provided in the Act in the six months after CHIPS was passed. This covers funding for projects to construct, expand, or modernize facilities producing semiconductors and for projects that are making large investments in facilities to produce semiconductor materials and manufacturing equipment.

Already, the Department of Commerce has received more than 460 statements of interest from companies for projects across 42 states interested in receiving CHIPS funding to invest across the semiconductor value chain from manufacturing to supply chains to commercial R&D.

The investment also has wider international implications.

The Department of State announced in March 2023 its plans for implementing the International Technology Security and Innovation Fund to support semiconductor supply chain security and diversification, as well as adoption of trustworthy and secure telecommunications networks. The State Department has already announced partnerships with Costa Rica, Panama, and the OECD to explore opportunities to collaborate on the global semiconductor supply chain.

As it implements CHIPS, the Department of Commerce has been in close touch with a number of partners and allies including the Republic of Korea, Japan, the United Kingdom, India, and the European Union. The United States is engaging with partners and allies to coordinate government incentive programs, build resilient cross-border semiconductor supply chains, promote knowledge exchange and collaboration in developing next-generation technologies, and implement safeguards to protect national security.

The Department of the Treasury released a proposed rule in March 2023 to provide guidance on the Advanced Manufacturing Investment Credit, a 25% investment tax credit for companies engaged in semiconductor manufacturing and producing semiconductor manufacturing equipment. The Department of the Treasury also released a proposed rule in June 2023 to allow companies to receive the full amount of the Advanced Manufacturing Investment Credit as a direct payment from the Internal Revenue Service.

The Department of Defense and Department of Commerce signed an agreement to expand their collaboration to make sure that CHIPS investments will position the United States to manufacture semiconductors essential to national security and defense programs.

CHIPS Act Jobs and Workforce Pipelines

An initial set of five Workforce Hubs aim to create pipelines for the semiconductor industry and other industries seeing an increase in investments, including CHIPS, the Inflation Reduction Act for batteries and the Bipartisan Infrastructure Law for wireless infrastructure. The White House also announced a national Workforce Sprint focused on creating pipelines into advanced manufacturing jobs, including in the semiconductor industry.

At least 50 community colleges have already announced new or expanded semiconductor workforce programs. In July, the White House launched its first Workforce Hub in Columbus, Ohio, where Columbus State Community College announced a new partnership with Intel which will create a new semiconductor technician credentialing course, available this fall.

The National Science Foundation is investing in the American semiconductor workforce through new initiatives focused on the manufacturing workforce, supporting researchers, and curriculum development. This includes partnerships with major semiconductor and technology companies.

The Department of Commerce is also continuing to work on other parts of its $11 billion R&D funding including the metrology program, the National Advanced Packaging Manufacturing Program, and up to three new Manufacturing USA Institutes.

The Department of Commerce released a funding opportunity in May 2023 for Phase 1 of the $500 million Tech Hubs Program. This is an economic development program to develop centers of innovation across the country through support of regional manufacturing, commercialization, and deployment of key technologies.

Last week the Department of Commerce announced its first round of grants from its $1.5 billion Public Wireless Supply Chain Innovation Fund to support the development of open and interoperable wireless networks.


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