CHIPS for America Act promises $22.8 billion in aid

June 11, 2020 // By Peter Clarke
CHIPS for America Act promises $22.8 billion in aid
US lawmakers have introduced a bill into Congress that , if passed into law, will provide $22.8 billion in research and construction funds and tax credits to support domestic IC production.

The value of support is less than the $37 billion that was being asked for by the Semiconductor Industry Association (see US semiconductor industry seeks $37 billion government boost). Nonetheless, the SIA has applauded the introduction of the Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS for America Act), saying the act would invest tens of billions of dollars over the next five to 10 years to strengthen and sustain American leadership in chip technology.

The move reflects a recognition within the government that, like China, the US is reliant on leading-edge chips made in Taiwan. While that has allowed the US to exert pressure on Chinese communications equipment maker Huawei (see US tightens restrictions on Huawei's chip supply) it is also an Achilles heel for the US.

The money under CHIPS for America is earmarked to support the building of wafer fabs in the US and buying chipmaking equipment to put in them, as well as sponsoring research The possibility of the funding initiative was evident in discussions recently held with leading chipmakers about building wafer fabs in the US (see US talks to Intel, TSMC about building local foundry fabs).

The money would be an aggregate of state and federal funding over a five-year period and that funding could in part come in the form of matching funds. About $10 billion could be within a federal grant program that would incentivize new domestic semiconductor manufacturing facilities. However, with the cost of a leading-edge wafer fab now reaching the order of $15 billion, the US funds may not go far.

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