The Biden administration on Tuesday released its implementation plan to guide federal investments in revitalizing the U.S. semiconductor base to ensure a more stable supply chain, and invest in the development and production of leading-edge computer chips to meet demand across defense, national security and commercial sectors.
Release of the strategy by the Department of Commerce follows President Biden’s signing on Aug. 9 of the $50 billion bipartisan CHIPS Act that creates a range of federal incentives to rebuild domestic semiconductor development, manufacturing and related processes, and create new jobs.
“CHIPS for America will ensure continued U.S. leadership in the industries that underpin our national security and economic competitiveness,” Commerce Secretary Gina Raimondo said in a statement.
Ongoing supply chain disruptions related to the COVID-19 pandemic have highlighted U.S. reliance on foreign sources of semiconductors, causing delays in some weapons programs.
To implement the CHIPS program, the Commerce Department is establishing two new offices within its National Institute of Standards and Technology, the CHIPS Program Office (CPO) and the CHIPS R&D Office. The CPO will work across the department to coordinate related activities and ensure coordination across the government, including with the Departments of Defense, State, Energy, Homeland Security, the Office of the Director of National Intelligence, the National Science Foundation, and the Office of the U.S. Trade Representative.
The R&D Office will oversee the establishment of a new National Semiconductor Technology Center that will conduct research and prototyping of advanced semiconductor technology and establish an advanced semiconductor packaging program.
Both offices will also work with allied and partner nations to strengthen supply chain resiliency and protect semiconductor technologies.
Most of the CHIPS funding, about $28 billion, will go toward grants, cooperative agreements, loan subsidies and guarantees aimed at boosting investment in domestic facilities for leading-edge manufacturing of logic and memory chips “that require the most sophisticated manufacturing processes available today,” the plan says. It also expects the federal funding to account for “only a small part of the total expected investment in the semiconductor industry,” with more significant contributions coming from the private sector, loans and state and local funding.
About $11 billion in CHIPS funding will go toward R&D initiatives, which include establishing several manufacturing institutes across the country to advance research and commercialization of semiconductor manufacturing technologies.
The plan also calls for investing about $10 billion to expand manufacturing capacity for “mature and current-generation chips, new and specialty technologies, and for suppliers to the industry.”