The Biden administration has revealeddetails of how it plans to invest $50 billion into kickstarting the US semiconductor industry, a month after President Joe Biden signed the CHIPS and Science Act. The Commerce Department says the funding will “revitalize the domestic semiconductor industry and spur innovation while creating good-paying jobs in communities across the country.”
Over half (roughly $28 billion) of the CHIPS for America Fund has been earmarked for boosting production of logic and memory chips in the US using the most advanced processes available. The agency plans to disburse the funds through grants and loans, which will be used to build and expand facilities for making, testing, assembling and packaging chips.
The government is looking to ramp up production of older chips as well. Approximately $10 billion will go toward building semiconductors for cars, communications tech, medical devices and defense, as well as other critical commercial sectors. On top of that, the Commerce Department says $11 billion of the funding will go into research and development.
The agency plans to start accepting applications by early February. It says loans and grants will be provided on a rolling basis, as soon as it can “responsibly” process, evaluate and negotiate applications. Commerce Secretary Gina Raimondo told The New York Times that the department could start releasing the funds as soon as next spring.
It will likely take a few years before domestic production of chips meaningfully increases, as it will take some time to build or expand semiconductor fabs. The impact of the CHIPS and Science Act, which passed with bipartisan support, could help mitigate any fallout from tensions between the US and China over Taiwan, where more than two thirds of the most advanced semiconductors are built. The Commerce Department notes that the US currently makes “zero percent” of the planet’s supply of state-of-the-art semiconductors, even though many are designed in the country.