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Biden Sets Up $11 Billion Semiconductor Network To Boost Domestic Manufacturing

President Joe Biden’s administration is setting up a network of advanced computer chip facilities to boost domestic manufacturing.

The Commerce Department plans to establish the National Semiconductor Technology Center, which would have academic and industry partners collaborate in products and workforce development.

The plan would hope to boost semiconductor technology in the United States, reducing development time for semiconductors and training the workforce necessary for the industry.

“It will enable us to develop a robust ecosystem which will allow us to not just have a few new fabs in America, but to regain America’s leadership in the research and development of technologies of the future,” Commerce Department Secretary Gina Raimondo said.

The Associated Press

In this May 14, 2020, file photo, employees wearing protective equipment work at a semiconductor production facility for Renesas Electronics during a government-organized tour for journalists in Beijing. China has announced tax breaks to spur growth of its semiconductor industry following U.S. sanctions that cut off access to American processor chips for tech giant Huawei and some other companies. (Mark Schiefelbein, File/AP)

Last year, Congress passed the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, a $280 billion package that would boost domestic semiconductor chip manufacturing and high-tech research.

The legislation would provide:

  • $52 billion in financial incentives to the semiconductor industry.
  • $80 billion in increased funding to universities through the National Science Foundation (NSF).
  • $50 billion in funding for research at the Department of Energy (DOE).
  • $1.5 billion to spur mobile broadband development.
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The legislation also has a 25 percent investment tax credit for investments in semiconductor manufacturing.

The legislation sparked disagreement among Republicans, as some expect the bill to boost domestic high-tech manufacturing, while others believe the bill amounts to corporate welfare.

Bloomberg reported:

The law gives the Department of Commerce $11 billion over five years for research and development in advanced semiconductor manufacturing, development of new technologies and training workers. It’s part of a total $52.7 billion that also includes $39 billion in incentives to jumpstart production.

The plan is to try to bring production back to the US by building at least two new clusters of leading-edge logic-chip manufacturing, with a supplier ecosystem and research and development facilities, employing thousands of workers.

“It’s a place where industry and academia and startups and investors can come together to solve the biggest, grandest challenges and set priorities, which is something that is hard for companies to do in the context of their corporate structure because they’re focused on short-term engineering and making profits,” Raimondo said.

She continued, “This allows everyone to step back and say ‘What are the 100X opportunities, and how do we go make them happen?”

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