The Biden administration outlined plans to invest $50 billion to launch a domestic semiconductor industry under the CHIPS Act.
According to U.S. Commerce Secretary Gina Raimondo, about $28 billion is earmarked to expand the production of logic and memory chips using advanced processes. The government plans to provide the funds as grants and loans to build and expand capacity for the design, testing, assembly and packaging of processors.
The administration also aims to boost production of legacy chips. $10 billion will go toward creating semiconductors for automobiles, communications technologies, medical devices, defense and other critical commercial sectors. A further $11 billion will go to research and development.
The government will begin accepting applications by early February 2023. Raimondo said the department could begin disbursing funds as early as next spring.
Additionally, recipients of federal funding will be barred from building ‘advanced technology’ facilities in China for 10 years.
“We are going to establish barriers so that CHIPS funds recipients cannot jeopardize national security […]. They cannot use this money to invest in China, they cannot develop advanced technologies in China […] for 10 years,” said Raimondo.
She added that subsidized companies will be allowed to expand only mature node-manufacturing facilities in China to serve the local market.
The department believes that the CHIPS Act will help the United States regain world leadership in semiconductor manufacturing. According to the department, the United States accounts for only about 10% of global chip capacity and just 3% of global packaging, assembly and testing services.
“The United States no longer produces the world’s most advanced semiconductors and has lost the ability to produce key supply-chain resources,” the department admitted.
The department added that recent Chinese advances in chipmaking have exacerbated the risk of disruptions to U.S. logistics and manufacturing.
Earlier in July, the U.S. Congress passed the CHIPS Act to spur chip production. The authors said the initiative would reduce the United States’ dependence on foreign suppliers, lower electronics prices and create thousands of jobs.
In September, the U.S. Department of Commerce restricted the export of chips used in supercomputers and artificial intelligence to China and Russia. The ban covered products from Nvidia and AMD.
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