CHIPS Act final $6 billion in semiconductor bonuses | Wilnesh News

The CHIPS Act incentive funding introduced by the Biden administration has so far been focused on providing major incentives to large companies, with just four leading semiconductor manufacturers receiving the largest share of the $33 billion allocated to this point so far.

Now, with $6 billion remaining, the focus has shifted to handing out smaller awards to dozens of small companies up and down the supply chain.

The goal is to use the remaining grants to attract as much private investment as possible while also strengthening supply chain resiliency and economic security by funding U.S. facilities in areas such as materials and packaging, administration officials and industry experts said.

“We are really focused on investing in the entire semiconductor ecosystem,” Michael Schmidt, director of the U.S. Department of Commerce’s CHIPS program office, told CNBC.

This means focusing investments on both upstream suppliers (such as companies that provide materials and equipment) and downstream players (such as companies involved in advanced packaging that occurs after semiconductor production). Schmidt said some currently mature technologies, also known as traditional chipmakers, may also receive a portion of the remaining funding.

“Once we start rebuilding the ecosystem in this country, once we start rebuilding it at the scale that we expect to see in this country, I think that will create continued investment and investment momentum and continue to attract businesses to invest in the future,” he said.

The question of where the remaining CHIPS Act awards will be spent looms now that the Department of Commerce has announced recipients of nearly 85% of the grant funds and committed to distributing the remaining funds by the end of the calendar year.

Hundreds of companies are still vying for the remaining funds: Commerce Secretary Gina Raimondo said in February that more than 600 companies initially submitted expressions of interest, but only nine have received awards so far.

Intel, British Semiconductor, Samsung and Micron In total, nearly $28 billion will be received, while GlobalFoundries received $1.5 billion and four smaller companies—BAE Systems, microchip, Polar Semiconductor and Absolics – receiving a total of $392 million. An additional $3.5 billion has been set aside for the “Secure Enclave” program, which will produce military semiconductors.

Paul Triolo, head of technology policy at Albright Stonebridge Group, said the series of awards announced so far underscores the Commerce Department’s focus on what the industry calls “front-end manufacturing.” , that is, the production of the wafer itself.

Triolo wrote in an email to CNBC that he attributed the attention to the “highly political nature of the awards” and the need to showcase recent advances in advanced manufacturing capabilities.

But Raimondo Committed By 2030, build the U.S. chip supply chain from start to finish.

Schmidt emphasized that the Commerce Department’s focus has been on providing funding for all these players, and that there will be “significant investments” throughout the supply chain.

Furthermore, given that awards announced so far have prompted private companies to commit more than $300 billion to cutting-edge production, Schmidt said he expects “significant secondary investment” to soon benefit smaller suppliers.

The Department of Commerce has also earmarked US$500 million in incentives for companies with project capital investments totaling US$300 million or less.

“We’re really going to see these benefits across the industry,” Schmidt said. “I still think we’re going to make very significant investments in the upstream supply chain and really build an overall portfolio that advances economic and national security interests.”

One of the suppliers in talks with the Commerce Department over the CHIPS awards is IQE, a UK-based company that produces compound semiconductor wafers for major companies such as Apple.

IQE CEO Americo Lemos told CNBC that while he understands the interest in funding cutting-edge chip manufacturing to build artificial intelligence systems, funding smaller companies that play support roles is also critical to ensuring the security and resilience of the U.S. chip supply chain.

“We need to make sure that in an environment where geopolitics is not easy to deal with, we continue to look at the supply chain as a whole,” Lemos said in an interview.

“Of course, the industry is focused on artificial intelligence, GenAI, and its benefits and applications, but that’s not enough to build high-performance chips,” he continued. “Without compound semiconductors there is no artificial intelligence – very simple.”

Schmidt said that as remaining appropriations dwindle, the upcoming bonuses will be smaller than the billions of dollars that have been awarded so far. But for small companies, even a modest award can have a significant impact.

“There’s a lot that can be done with less money for these upstream projects,” said Jimmy Goodrich, senior adviser for technology analysis at the RAND Corporation. “There’s a lot of runway left.”