US CHIPS Act funds $ 52B for semiconductor manufacturing: comments and analysis

Date: 10/08/2022
Digital and analog integrated circuits made out of semiconductor materials forms the brain of the modern global engineering Systems from IoT enables farm-equipments on the farmland to space vehicles navigating on the planet Mars. Since they were invented, United States of America hold a tall leadership position from 60s to these pandemic hit times, where the semiconductor chip shortage has hit its peak. US position was challenged continuously by Europe, Japan, Israel, Southeast Asia and now China. US semiconductor industry found innovative ways to maintain its lead position through various innovative ways in doing business as well as achieving technology research advancements. US has a complete Eco for semiconductor chip manufacturing starting from materials to advance design software.

As the chip making foundries such as TSMC, Samsung and some newly emerging Chinese semiconductor fabs achieve significant lead over foundries elsewhere, a new geopolitical economic activity is getting churned out to make chips locally in their own regions. The reason is simple, it's not only business economics, semiconductor are vital and strategic for country's security. It is not at all foolish decision to invest billions of dollars in a domestic semiconductor manufacturing facility. US takes lead in supporting its chip industry industry financially to pull back chip manufacturing operations back to US.

US president Joe bidden has signed CHIPS and Science Act, involving US$ 280 Billion package which includes US$ 52 billion in funding for semiconductor manufacturing incentives and research investments, as well as an investment tax credit. This happened after seeing huge growth of China based semiconductor manufacturing which threatened US dominance in chip making. TSMC and Samsung could make chips packing more denser circuits compared to Intel. Intel which has maintained its number one position by revenue for many years lost that position couple of times.TSMC and Samsung have generated more quarterly revenue than Intel in some of the quarters in recent years.

Now Intel and Globalfoundries and many such chipmakers in US can leverage this bill to maintain the lead in the market. However challenges remain in terms of skilled workforce available in US for these companies. This initiative will create lot of indirect jobs in US in construction, material engineering and in other support areas. Along with funding, US need innovative brains such as Steve Jobs to disrupt this market. Now we have Elon Musk of Tesla who can disrupt the semiconductor market in his style. Is he planning to enter this market? Tesla is already designing its own chips. Internet search company Google is also heading to play its role in this market.

US semiconductor industry Association SIA played a key role in this bill.

Keith Jackson, past CEO of ON Semiconductor and 2020 SIA chair had earlier said “Semiconductors were invented in America and U.S. companies still lead the world in chip technology today, but as a result of substantial government investments from global competitors, the U.S today accounts for only 12 percent of global semiconductor manufacturing capacity. The CHIPS for America Act would help our country rise to this challenge, invest in semiconductor manufacturing and research, and remain the world leader in chip technology, which is strategically important to our economy and national security. We applaud the bipartisan group of leaders in Congress for introducing this bill and urge Congress to pass bipartisan legislation that strengthens U.S. semiconductor manufacturing and research.”

John Neuffer, President and CEO of SIA commended President Biden for signing the CHIPS Act of 2022 into law and said “Today marks a giant leap forward for American innovation and competitiveness and the launching point for re-asserting U.S. leadership in semiconductors. By enacting the CHIPS Act, President Biden and leaders in Congress have fortified domestic semiconductor manufacturing, design, and research, thereby strengthening America’s economy, national security, and supply chains for decades to come."

“We thank President Biden and Secretary Raimondo for their unwavering support and leadership and applaud the bill’s champions in Congress – led by Sens. Schumer, Cornyn, and Warner, as well as Reps. Matsui and McCaul – for their tireless efforts to get this critical legislation across the finish line. The CHIPS Act will help usher in a better, stronger American future built on semiconductors.”

Below are the other US semiconductor industry executives' quotes and comments on this bill:

Intel CEO Pat Gelsinger said “Intel is committed to restoring end-to-end leadership, innovation and manufacturing here in the U.S. We are doing our part and the federal government has now done their part.” (Intel plans to break ground on two chip fabs in central Ohio valued at $20 billion and hopes to recoup $3 billion for each fab through the CHIPS Act.).

Micron CEO Sanjay Mehrotra: "I commend Congressional leadership for securing bipartisan support of the bill, and congratulate President Biden and his Administration, particularly Secretary Raimondo, who played a key role in getting the bill passed." "Building new memory manufacturing in the U.S. benefits domestic technology leadership and creates growth across industries and society as a whole. An investment such as this creates thousands of jobs, both inside and outside of technology manufacturing, and leads to broad industry innovation. The investments we are planning in the U.S. will create up to 40,000 new American jobs, including approximately 5,000 highly paid technical and operational roles at Micron. It will bring the most advanced memory to the most sophisticated technology solutions, which will now be proudly labeled “made in America.”
More of his comments can be found at:

AMD CEO Dr. Lisa Su: "Honored to be at The White House today as President Biden signed the CHIPS and Science Act - transformational for our semiconductor research, development and manufacturing ecosystem! AMD committed to doing our part in driving the innovation and tremendous opportunities enabled by this bill."

Tom Caulfield CEO Globalfoundries: "Thanks to President Joe Biden, Secretary of Commerce Gina Raimondo, Senate Majority Leader Chuck Schumer, Speaker Nancy Pelosi, Senators Cornyn and Leahy, Representatives Tonko and Welch, and the countless other dedicated advocates who fought to bolster the competitiveness of semiconductor manufacturing in the U.S."

Naveed Sherwani Chairman, President & CEO at RapidSilicon: "Our universities, research centers, and startups will have to play a big role to bring new innovations to semiconductor field … now they have strong alley in NSF with $80B to support them"

Jodi Shelton, Co-Founder and CEO, Global Semiconductor Alliance: "Today, the semiconductor industry got the love and respect it deserves at the White House #ChipsAct signing ceremony with President Biden. The US semiconductor industry is a vibrant and beautiful tapestry of talent and has historically attracted some of the brightest minds from every corner of the world. In the US , one-half of the semiconductor companies is led by a foreign-born CEO. However, one of the most serious challenges the global semiconductor industry faces as we grow from a $600 billion to a $1.2 trillion industry in the next 15 years is how to encourage and develop talent. It is our joint challenge --but also our opportunity to identify, recruit, and develop female technologists, innovators and leaders. Dr. Lisa Su, CEO AMD epitomize the ideal of a great leader -- in fact she is considered by many (me included) to be one of the greatest CEOs of our time. Join the Global Semiconductor Alliance GSA Women's Leadership Initiative --get involved, learn about our university programs and dozens of other programs we have introduced to attract, retain, develop and promote the next generation of semiconductor talent."

Tim Archer, President and CEO Lam Research: "Today is a historic day for our industry. Lam Research applauds the signing of the CHIPS and Science Act and the progress it represents. The implementation of this legislation is beneficial for the semiconductor ecosystem and the U.S. innovation economy at large"

Gregg Lowe, CEO at Wolfspeed: "I am thrilled to have been included in today's signing of the Chips Act, which represents a giant leap forward for semiconductor manufacturing, the electrification of everything, and a more sustainable world. President Biden talked about possibility today -- and as we look ahead, Wolfspeed is excited to be a part of shaping our future as we unleash the possibilities of Silicon Carbide."

EDA leader Synopsys: "We commend both the House and Senate for passing the CHIPS Act this week. This is an important step toward advancing U.S. semiconductor R&D, enablement and manufacturing, and boosting the domestic production of the semiconductors found in electronic devices we use daily."

Hassane El-Khoury CEO ON Semi: "this Act will positively impact the entire semiconductor industry and we at onsemi are ready to transform the future and beyond. "

Author: Srinivasa Reddy N
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