More than 460 companies have shown keen interest in securing government semiconductor subsidy funding, aiming to bolster the United States’ competitiveness in the realm of science and technology, particularly against China. The announcement comes as the White House commemorates the one-year anniversary of President Joe Biden’s signing of the pivotal “Chips for America” legislation. This landmark legislation allocated a substantial $52.7 billion in subsidies for the development of U.S. semiconductor production, research, and workforce expansion.
President Biden highlighted the significant strides made over the past year, with companies collectively pledging $166 billion towards semiconductors and electronics manufacturing. He expressed confidence in the legislation’s capacity to reinstate the United States as a dominant force in semiconductor manufacturing while simultaneously reducing dependency on other countries for electronics and clean energy supply chains.
The application process for the $39 billion subsidy program for U.S. semiconductor manufacturing, along with equipment and materials necessary for chip production, began in June under the purview of the Commerce Department. Despite the surge in applications, awards have not yet been issued. Commerce Secretary Gina Raimondo emphasized the importance of precision in executing the investment, asserting that swift action is crucial, but accuracy takes precedence.
An Intel CEO, Pat Gelsinger, applauded the global efforts aimed at revitalizing semiconductor manufacturing and strengthening supply chains, acknowledging the undeniable progress in the United States. The chips law encompasses a 25% investment tax credit intended to stimulate the establishment of chip plants, a provision estimated to be valued at $24 billion.
With an emphasis on national security and economic interests, the Commerce Department has undertaken rigorous due diligence. They are working to ensure that China does not benefit from U.S. funding and have incorporated criteria such as affordable childcare provisions and profit-sharing requirements for companies seeking substantial awards.
Commerce Secretary Raimondo emphasized the department’s cautious approach, clarifying that they will not extend blank checks to any company seeking funding. Once suitable projects are identified, officials will determine the amount of government funds to be allocated and devise award structures comprising a combination of grants, government loans, or loan guarantees.
Moreover, the legislation designates $11 billion for advanced semiconductor manufacturing research and development, with the National Semiconductor Technology Center taking a pivotal role. The Commerce Department is actively engaging with other governmental bodies to establish the center and facilitate cohesive collaboration across the semiconductor ecosystem, fostering a comprehensive approach to research, development, and workforce augmentation.
