Federal programs aim to strengthen semiconductor supply chain

The federal government is working to resolve supply chain issues that have hampered semiconductor manufacturing in the United States, offering billions of dollars to fix what it calls a national security issue.

Many elements of the semiconductor supply chain are geographically concentrated, leaving them vulnerable to disruption and endangering the global economy and U.S. national security.

Two funding opportunities through the $50 billion CHIPS for America program aim to resolve that, encouraging construction of facilities that manufacture semiconductor components throughout the United States.

One opportunity, launched earlier this year, seeks applicants who are building commercial semiconductor manufacturing facilities or will spend more than $300 million to build, expand or renovate facilities that make semiconductor manufacturing equipment.

The other, which launched in September and is seeking applications through February, looks to fund smaller-scale facilities with capital investments under $300 million that are also important to the semiconductor manufacturing supply chain.

Semiconductors — also known as chips — are used in everything from consumer electronics to advanced military systems.

While the United States remains a global leader in semiconductor design and research and development, it has fallen behind in manufacturing and now accounts for only about 10% of global commercial production, the National Institute of Standards and Technology said. None of the most advanced chips that power PCs, smartphones and supercomputers are manufactured at commercial scale in the United States.

The Department of Commerce said it will support funding for materials and manufacturing facilities that help it meet three economic and national security objectives, including:

Reducing supply chain bottlenecks associated with geographic concentration and vulnerability from relying on production in foreign countries like China
Advancing economic security by boosting semiconductor manufacturing knowledge and innovation in the United States
Building productive and self-sustaining ecosystems by clustering semiconductor fabrication facilities.

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