The U.S. Department of Commerce announced its first semiconductor manufacturing incentive as part of the CHIPS and Science Act this week. BAE Systems, which makes various chips for applications such as fighter planes, is set to get $35 million from the U.S. government. U.S. Commerce Secretary Gina Raimondo said that she expects to announce a dozen funding awards over the course of next year. Meanwhile, she warned that some fab projects could still be delayed.
"Next year we will get into some of the bigger ones with leading-edge fabs," Raimondo is reported to have said, according to Reuters. "A year from now I think we will have made 10 or 12 similar announcements, some of them multi-billion dollar announcements."
Meanwhile, Gina Raimondo has mentioned a significant challenge in expanding America's semiconductor industry: the potential for delays caused by standard environmental reviews. To a large degree, this poses a conflict between environmental regulations and national security goals.
"Obviously we want to do everything always to protect the environment," Raimondo told Bloomberg. "But this is a national security priority, and we need to move quickly."
Raimondo is concerned that these environmental permitting processes take a long time, which she fears could halt construction for years. This issue gained prominence after her request to exempt federally-funded chip projects from such reviews was rejected by House Republicans. As a result, major projects by companies including Intel, Micron, TSMC, and Samsung that cost tens of billions of dollars are at risk of being slowed down by these reviews.
Right now, the U.S. makes about 12% of the world's chips, down from 40% in 1990. The government's goal is to push that up to around 20%, which is a big jump. This whole effort is backed by the $39 billion CHIPS fund. The plan is to help each project with 5% to 15% of what they need to spend, but not more than 35% in total.
Part of the plan is to set up at least two advanced manufacturing hubs in the U.S. (such as those built by Intel and TSMC), then to restart making advanced memory chips (Micron has already announced such plans), and establish leading-edge packaging facilities (which Intel is already doing). There's also a focus on meeting the military's needs for different kinds of chips. There is a lot of interest, with over 550 companies indicating they are keen to participate, and nearly 150 putting in applications or proposals.
