The U.S. Commerce Department is prioritizing semiconductor chip plant projects to be completed by 2030 as it considers hundreds of applications from manufacturers seeking a share of $39 billion from the Science and CHIPS Act of 2022 earmarked for incentives to build plants, according to US Commerce Secretary Gina. Raimondo
Raimondo, speaking Feb. 26 at the Center for Strategic and International Studies in Washington, said his department had received more than 600 expressions of interest from companies asking for some of the money, but most won’t get any. With a limited amount of money available and “urgent national security objectives,” he said officials made the decision to prioritize those projects that will be completed first.
“I want to be clear, there are many worthy proposals that we have received with plans to come online after 2030,” Raimondo said. “And we say ‘no’, for now, to these projects, because we want to maximize our impact in this decade. It’s not responsible to give money to a project that will be online in 10 or 12 years if that means ” no” to excellent projects that could be online this year.”
Since publishing a funding opportunity notice last year, the Commerce Department has received more than 160 completed funding applications for both projects valued at more than $300 million and projects valued at less than 300 million dollars. Raimondo said officials planned to allocate about $28 billion of CHIPS Act funding to projects that will make “cutting-edge” chips used in the development of artificial intelligence. But these cutting-edge chipmakers alone have applied for more than $70 billion.
The goal is to get the US from its total lack of domestic production of cutting-edge logic chips today to producing about 20% of the world’s chip supply by the end of the decade, according to Raimondo.
The Biden administration has framed domestic semiconductor manufacturing as a key issue for both the economy and national security. Chip supply chain problems affected the production of some goods during the height of the COVID-19 pandemic, and the chips have widespread applications that include military equipment.
“Our job is to make targeted investments in the relentless pursuit of achieving our national security goals,” Raimondo said.
Since the program’s launch, Raimondo said the private sector has announced $200 billion in investments in semiconductor manufacturing. Nine states have also created economic development programs targeting the semiconductor industry to provide matching funding.
Commerce Department officials have already reached preliminary agreements with three companies to provide them with CHIPS Act funding. The largest award to date is $1.5 billion announced this month for three GlobalFoundries projects in New York and Vermont. Smaller amounts of money have also been set for BAE Systems Inc. and Microchip Technology Inc.
