The rollout of the Biden administration’s CHIPS Act award money has focused on providing major awards for leading-edge semiconductor manufacturers, with just four companies receiving the majority of the $33 billion allocated. However, with $6 billion remaining, the focus is now shifting to sending smaller awards to smaller companies up and down the supply chain. The goal is to attract private investment while boosting supply chain resilience by funding U.S.-based facilities in areas like materials and packaging.
The Commerce Department is investing across the semiconductor ecosystem, targeting both upstream suppliers – companies providing materials and equipment – and downstream players involved in advanced semiconductor packaging. Schmidt, the director of the CHIPS Program Office, stated that mature technologies or legacy chipmakers may also receive funds. The rebuilding of the semiconductor ecosystem in the U.S. is expected to attract ongoing investments and make the country an attractive place for companies to invest in the future.
As the Commerce Department has allocated nearly 85% of its grant money, the question of where the remaining funds will be directed looms large. Hundreds of companies are still competing for a portion of the remaining $6 billion. The focus has been on front-end manufacturing, the production of wafers themselves, but the department aims to develop the U.S. chip supply chain from end to end by 2030, requiring investment throughout the supply chain.
The focus of the awards has been on front-end manufacturing, with major companies receiving significant funding. However, smaller suppliers are also expected to benefit from the secondary investments that these awards will trigger. The Commerce Department is already aiming to provide significant investment throughout the supply chain, with $500 million set aside for companies with projects totaling $300 million or less in capital investment. Schmidt anticipates significant investments in the upstream supply chain to advance economic and national security interests.
Smaller companies, such as IQE, a U.K.-based supplier of compound semiconductor wafers, play essential support roles in the chip supply chain. IQE’s CEO emphasized the importance of funding smaller companies to ensure the security and resilience of the U.S. chip supply chain. Despite the dwindling grant money, forthcoming awards will continue to support smaller projects, with the potential for significant impact on the industry.
Overall, the CHIPS Act award money is aimed at fostering innovation in the semiconductor industry, attracting private investment, and enhancing supply chain resilience and economic security. By investing in both major players and smaller suppliers, the Commerce Department hopes to build a robust semiconductor ecosystem in the U.S. that will benefit both the industry and national security interests. With the potential for considerable investments in the future, the semiconductor industry is poised for growth and development in the coming years.
