The U.S. Department of Commerce has officially launched its first funding initiative under the CHIPS and Science Act. BAE Systems, known for its semiconductor applications in defense sectors like fighter planes, is set to receive $35 million from the government. This initial disbursement is a tiny part of a broader $52 billion plan aimed at bolstering the U.S. semiconductor industry.
U.S. Commerce Secretary Gina Raimondo has outlined the department’s plan to announce around a dozen funding awards in the coming year, with a focus on leading-edge fabrication plants (fabs). However, Raimondo has also expressed concerns about potential delays in major fab projects by companies such as Intel and TSMC.
A significant challenge noted by Raimondo involves the environmental review processes that these projects must undergo. She emphasizes the importance of balancing environmental protection with the urgency of national security priorities. The lengthy nature of these reviews, which can extend for years, poses a risk of delaying crucial semiconductor projects.
Raimondo’s request to exempt federally-funded chip projects from environmental reviews was rejected by House Republicans, raising concerns about delays in major semiconductor projects. This decision affects key initiatives by companies like Intel, Micron, TSMC, and Samsung, potentially impacting their progress and timelines.
The U.S. currently produces about 12% of the world’s semiconductors, a decline from the 40% share it held in 1990. The CHIPS Act, with its $39 billion fund, aims to increase this to around 20%. The plan is to support projects with 5% to 15% of their required expenditure, capping the total support at 35%.
The strategy includes establishing at least two advanced manufacturing hubs, revitalizing advanced memory chip production, and setting up leading-edge packaging facilities. The military’s need for diverse chip types is also a priority. The initiative has garnered significant interest, with over 550 companies expressing intent to participate and nearly 150 submitting applications or proposals.
