The US CHIPS Act 1+ Year Later – Things are Happening!

It has been a little over a year since the US passed the CHIPS and Science Act (August 2022), to provide investment for re-establishing the US as a semiconductor manufacturing leader once again.

In 1990, the US semiconductor manufacturing capacity share was 37 percent and now it is down to 12 percent. Semiconductors are everywhere in our daily lives, and they are a key issue for national security and economic growth. Thus, the reason the US government, and now many others, have stepped up funding for this vital industry.

It is key to understand that the global supply chain in this industry is very complex: From raw materials to making silicon cylinders, cutting those into wafers, processing those wafers by adding a design onto them (which could be a microprocessor, a DRAM, an SoC, etc.), then putting the chip in a package.

Lots of industries like Design Automation, Test & Measurement, and Chemical industries, to name a few, support the broader semiconductor industry and it takes all of those suppliers of the key pieces and many more to enable semiconductors to be designed and delivered.

US Commerce Department Takes the Lead

For the past year, the Commerce Department of the U.S. Federal Government, which is the focal point for carrying out most of the key CHIPS programs, has been putting infrastructure in place for the many parts of the CHIPS Act. Most of that work is done and now things are beginning to flow.

The goal of the CHIPS Act is to strengthen America’s semiconductor ecosystem through a mix of programs that give grants, tax credits, and encourage research and development partnerships with funding.

Here is a list of a few programs to facilitate U.S. competitiveness as detailed in an article by the US Chamber of Commerce published August 28th by Matt Furlow.

  • A new $10 billion program for Regional Technology Hubs or “Tech Hubs” to help facilitate the development of new R&D and economic hubs to drive technology and innovation investments in diverse geographical locations across the US.
  • Allocating $20 billion for the NSF’s Directorate for Technology, Innovation, and Partnerships (TIP) for ‘use-inspired research’ to accelerate critical technologies such as AI, 6G communications, biotech, and advanced manufacturing.
  • Requiring the Office of Science and Technology Policy (OSTP) to develop a quadrennial national science and technology strategy, which is crucial to identifying and outlining science and technology priorities.


Private Sector Investing alongside CHIPS ACT – Focus Texas

In terms of the private sector, over $166 billion in semiconductor-related investments have been announced post-CHIPS enactment. Large investments have been made by TSMC for semiconductor fabs in Arizona and Intel in Ohio. Texas is also seeing big investments and here are a few examples.

  • Texas Instruments $30 billion for building new Semiconductor fabs in Sherman, Texas
  • Samsung $17 billion for building new Semiconductor fabs around Austin, Texas
  • GlobiTech will invest in building new Advanced 300-millimeter silicon wafer capacity in Sherman, Texas


But some private sector companies are waiting to invest providing they can receive federal funding from the CHIPS ACT. One of those is Integra Technologies, which provides semiconductor packaging and other services and has big plans to build a 1 million-square-foot facility in Wichita, Kansas. To give credit where credit is due, the Commerce Department has hired 140 staff members tasked with evaluating CHIPS Act applications, so resources are in place to get more funding deployed soon.

CHIPS ACT: DOD Announcement of Funding for 8 Innovation Hubs

Turning attention to the U.S. Department of Defense (DOD). Working with Commerce, they are a key part of helping manage the CHIPs ACT.

On September 20, 2023, they announced the largest award to date, $238 million, toward establishing eight regional innovation hubs.

The hubs aim to accelerate hardware prototyping and “lab-to-fab” transition of semiconductor technologies for secure edge/IoT, 5G/6G, AI hardware, quantum technology, electromagnetic warfare, and more.

The eight awardees per the DOD press release announced by Deputy Secretary Kathleen Hicks are:

  1. Northeast Microelectronics Coalition (NEMC) Hub – Lead Hub State: Massachusetts w/90 Hub members
  2. Silicon Crossroads Microelectronics Commons (SCMC) Hub – Lead Hub State: Indiana w/130 Hub members
  3. California Defense Ready Electronics and Microdevices Superhub (California DREAMS) Hub – Lead Hub State California w/16 Hub members
  4. Commercial Leap Ahead for Wide Bandgap Semiconductors (CLAWS) Hub – Lead Hub State North Carolina w/7 Hub members
  5. Southwest Advance Prototype (SWAP) Hub – Lead Hub State Arizona w/27 Hub members
  6. Midwest Microelectronics Consortium (MMEC) Hub – Lead Hub State Ohio w/65 Hub members
  7. Northest Regional Defense Technology Hub (NORDTECH) – Lead Hub State New York w/51 Hub members
  8. California-Pacific-Northwest AI Hardware Hub (Northwest-AI Hub) – Lead Hub State California w/44 Hub members


As you can see with the DOD-defined Hubs, multiple states are involved in different semiconductor focus areas, with many Hub members participating from research groups, universities, and industry. Thus, the CHIPS Act is now reaching out across America to get to the best and brightest from multiple different angles and perspectives, for the U.S. to regain world leadership in semiconductor technologies and manufacturing. Pretty exciting, in future blogs I’ll talk about how critical mass is building across the country to help achieve the CHIPS Act goals.

Additionally, on a very specific award, the DOD awarded GlobalFoundries a 1-year contract with a total spending ceiling of $3.1 billion for securely manufactured, U.S.-made semiconductors for use across critical aerospace and defense applications. GlobalFoundries was the manufacturing operation and plant that in 2009 spun off from AMD as AMD transitioned into a fabless semiconductor supplier.

What’s Next?

After one year of passage of the CHIPS Act, structures have been put in place. With a commitment to funding, both the Commerce and Defense Departments are establishing strategies like Hubs with a focus on all areas of the semiconductor supply chain and associated technologies.

My next blog will focus on the Commerce Department’s Tech Hub strategy and the recent roll-out and announcement, by President Biden on a Zoom call across the country, of the Commerce Hubs supported by the CHIPS Act.

Glenn Woppman