Commerce Secretary Gina Raimondo says America expects to use funds from the Chip Acts to introduce two semiconductor manufacturing clusters by 2030. This marks the early stages of bringing chip manufacturing to U.S. soil. The goal is to build ecosystems that unite research and development labs, fabrication plants, final chip assembly packaging facilities, and suppliers required for all operational phases. "When we are done implementing this by 2030, America will design and produce the world's most advanced semiconductor chips," Raimondo told reporters in a briefing. This upcoming Thursday, Raimondo will discuss the plans at Georgetown University during a speech. The Commerce Department expects to explain further how companies can apply for funding.
However, there hasn't been any mention of where the clusters could go, but Arizona, Ohio, and Texas potentially hold that opportunity based on investments by companies that manufacture advanced chips, including Intel, Samsung Electronics, and Taiwan Semiconductor Manufacturing. Intel plans to invest $20 billion per facility in Chandler, Arizona, and New Albany, Ohio. TSMC has an ongoing $40 billion project in Phoenix, while Samsung Electronics is investing $17.3 billion in a Texas-based plant. Micron Technology and Texas Instruments also revealed investment plans.
According to the Semiconductor Industry Association, the program started an investment boom as the U.S. and foreign manufacturers revealed over 40 projects with investments worth nearly $200 billion. Joe Biden signed the Chips Act into legislation in August, offering $39 billion toward building and expanding manufacturing facilities. It also includes $12 billion for research and development and workforce development.
However, industry advocates are concerned about thinly spreading the funds or whether the states can hire sufficient workers to construct and operate the new plants. Raimondo says the government would pressure chip companies to form partnerships with high schools and colleges to train over 100,000 technicians in the upcoming years.
Companies switched to overseas factories for cheaper labor and production costs, causing the U.S. global semiconductor shares to drop from 37% to 10%. Taiwan manufactures 85% of the most advanced chips, while America doesn't mass produce them at all. "The Chips Act is so essential because over the past few decades, we as a country have taken our eye off the ball and let chip manufacturing move overseas," Raimondo said.
Georgetown Center for Security and Emerging Technology analyst Will Hunt suggests the U.S. add more capacity so that it can produce leading-edge chips. According to a 2022 report, $23 billion of incentives from the Chips Act allows Intel, Samsung, and TSMC to establish a long-term presence on U.S. soil to meet domestic needs through 2027.
Plants producing memory chips would be funded by the Chips Act on "economically competitive and sustainable terms." Additionally, the U.S. plans to boost production capacity for current-gen and mature node chips essential for medical devices, defense equipment, and auto. Companies eager for the subsidies are expected to compete with each other as it rolls out.
The selection process depends on how the plans can work for the government's national security goals. "The purpose of this legislation isn't to subsidize companies because they're struggling in this cyclical downturn. It isn't to help companies necessarily become more profitable in America," Raimondo said. "The reality is the return on our investment here is the achievement of our national security goal."
Union workers will construct the clusters in accordance with the Chips Act. This will also create thousands of jobs that don't need a college degree. The National Semiconductor Technology Center, a research and development program, is expected to receive funds through the Chips Act. Universities, industry, entrepreneurs, and private capital will be brought together to develop advanced technologies.
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