$1.4 billion awarded for domestic semiconductor packaging research, development

January 28, 2025

The U.S. Department of Commerce (DOC) is allocating $1.4 billion in funding to research and develop advanced packaging and enable new technologies that reinforce national leadership in semiconductor manufacturing. 

The federal funding, part of the CHIPS for America agenda, looks to establish domestic capacity for advanced semiconductor packaging and accelerate the development of these technologies nationwide.  

The largest grant in this round, $1.1 billion in direct funding, will support the development and operation of the CHIPS for America NSTC Prototyping and NAPMP Advanced Packaging Piloting Facility (PPF) in Tempe, Arizona. To be located at the Arizona State University (ASU) Research Park, the proposed facility will be a cornerstone of the CHIPS for America agenda, seeking to bridge the gap between lab research and full-scale semiconductor production. 

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As one of three flagship research facilities under CHIPS, the PPF will prioritize the research and development of novel materials and device architectures to explore advanced packaging solutions in a manufacturing-like environment. The facility will offer researchers and industry stakeholders the opportunity to pursue innovations that aren’t feasible at a manufacturing site. 

The federal funding will enable Natcast to operate and manage the proposed facility and initiate research on key packaging capabilities, including a baseline advanced packaging piloting line to enable the development and commercialization of new innovative processes. In partnership with ASU, the project will also provide renewed workforce opportunities by creating a collaborative, hands-on environment with industry-leading tools and equipment. 

According to project timelines, the PPF is expected to be constructed and operational in 2028, seeking to play a vital role in driving U.S. leadership in semiconductor innovations, national security developments and opportunities for economic growth. Additional information on the project and its funding can be found on NAPMP’s first Notice of Funding Opportunity in July

Following CHIPS intent to enter negotiations last year, DOC will also fund projects that research substrates and materials used to manufacture advanced packaging. The grant funding, totaling $300 million, will be delivered to three projects for innovations in advanced packaging technology in Arizona, California and Georgia. 

ASU will receive a $100 million investment for a project at Advanced Electronics and Photonics Core Facility to advance the development of microelectronics packaging, specifically through fan-out-wafer-level-processing (FOWLP). The project will explore the commercial viability of 300 mm wafer-level and 600 mm panel-level manufacturing. 

The funding will support ASU’s Substrate-based Heterogeneous Integration Enabling Leadership Demonstration for the USA (SHIELD USA) program, which will design and develop molded core substrates that enable leap-ahead performance in organic substrate-based microelectronics packages. 

In addition to research and development, ASU project will include a variety of workforce developments to revive and renew local crews and current working professionals, including learning experiences, training programs, residency programs, reskilling initiatives and expansions to the K-12 pipeline. 

One advanced packaging project, led by Applied Materials, Inc., will benefit from a $100 million CHIPS grant to develop and scale disruptive silicon-core substrate technology in Santa Clara, California. 

The project will research and develop this silicon-core technology and inform domestically produced next-generation energy-efficient artificial intelligence and high-performance computing systems. Applied Materials will also enhance several key advanced packaging technologies, including but not limited to equipment, tools, processes and interoperable process integration. 

The DOC will award its final $100 million grant to Absolic Inc. in Georgia to support and expand the Substrate and Material Advanced Research and Technology (SMART) Packaging Program. The initiative seeks to build a glass-core packaging ecosystem that enhances the efficiency and performance of next-generation chips. 

The SMART program will conduct a variety of research and development initiatives to rapidly manufacture leading-edge glass core packaging technology and commercialize new technology applications such as digital and RF/mm-wave. 

Empowered by federal funding, Absolics will collaborate with partners to create new curriculum, educational programs, additional certifications and professional development opportunities to build out a glass substrate packaging ecosystem around the country. 

These federal investments, part of the broader CHIPS for America agenda, are intended to revitalize the domestic semiconductor industry by fostering innovation, creating jobs and reducing dependence on foreign manufacturing and materials. The research and development of advanced packaging technology will be necessary to expand this domestic industry, especially as chip design becomes more complex and demand continues to rise. 


Image by Tobias Dahlberg from Pixabay

Brady Pieper

written for various daily and weekly publications in Texas and Colorado, specializing in the government market and in-depth bill coverage. Graduating from the University of Texas at Austin with a degree in Journalism, Pieper has been at the forefront of public and private sector communications and government initiatives. Pieper recently joined the Government Market News team as a content writer and anticipates continuing SPI’s long-standing tradition of delivering timely, accurate and significant government news to our readers and partners.

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