Commerce Secretary Gina Raimondo on Tuesday unveiled a strategy for the Commerce Department’s disbursal of $50 billion that Congress approved to boost domestic manufacturing of semiconductor chips. She expects the first money to flow in the spring of 2023.
Semiconductors are crucial components in devices such as mobile phones and pacemakers. They’re also the key to advanced technologies like quantum computing, artificial intelligence and unmanned drones. “With this funding we are going to make sure that the United States is never again in a position where our national security interests are compromised or key industries are immobilized due to our inability to produce essential semiconductors here at home,” Raimondo said, reported Roll Call.
About $28 billion of the so-called CHIPS for America Fund is expected to go toward grants and loans to help build U.S. facilities for making, assembling and packaging some of the world’s more advanced chips. Another $10 billion will be devoted to expanding manufacturing for older generations of technology used in cars and communications technology, as well as specialty technologies and other industry suppliers. About $11 billion will go toward chip R&D initiatives.
To receive the money, companies will need to demonstrate the long-term economic viability of their project, as well as “spillover benefits” for the communities they operate in. Examples would be investments in infrastructure and workforce development, or their ability to attract suppliers and customers, the department said, according to The New York Times.
Projects that involve economically disadvantaged individuals and businesses owned by minorities, veterans or women, or that are based in rural areas, will be prioritized, according to the Commerce Department. So will projects that help make the supply chain more secure by, for example, providing another production location for advanced chips that are manufactured in Taiwan. Companies are encouraged to demonstrate they can obtain other sources of funding, including private capital and state and local investment.
Intel, Micron, and other chip makers have announced plans to open domestic manufacturing plants in anticipation of the federal program, Inside Towers reported. President Joe Biden plans to participate at a groundbreaking event for an Intel plant in Ohio on Friday. Intel plans to spend $20 billion to build two manufacturing plants in Ohio.
Raimondo said the department would call for applications from companies starting about February 2023, and expects to announce awards that spring. The first set of grants are likely to be for smaller projects and the bigger ones may come later, she said, noted Roll Call.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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