Farewell to the US CHIPS Act

The US CHIPS and Science Act is not expected to last long as the new President takes over.

The CHIPS Programme Office (CPO) is spending $39bn on rebuilding the domestic semiconductor manufacturing base and securing the semiconductor supply chain. Along with the Inflation Reduction Act (IRA), these provided a model for the European CHIPS Act and Critical Raw Material Act, which have survived the transition to the latest set of Commissioners. 

However the rollout in the US has been a challenge. The CPO has disbursed just $4bn so far, with $30bn agreed and preliminary terms for an additional $2bn with 34 deals across 22 states. This will generate 17 new fabs and eight advanced packaging plants by 2030 if all the funding goes through. Projects for Analog Devices and Coherent was confirmed in the last days of the administration.

“Over the last four years, my mission at the Department of Commerce has been to unite our tools in an effective way to enhance U.S. competitiveness and protect U.S. national security,” said US Secretary of Commerce Gina Raimondo.

The department says the US has seen more investment in electronics manufacturing over the last four years than in the previous three decades combined. Planned investments from the industry are nearly $450 billion, marking the largest wave of semiconductor manufacturing expansion in US history.

The R&D element of the funding, vastly oversubscribed, has seen thirty-one regional Tech Hubs, with more than $700 million in investments for key technologies of the future. Investments include developing facilities to commercialize new technologies in fields from sustainable polymers, to drones, to quantum sensing. 

The Tech Hubs have already attracted nearly $6 billion in investment commitments from private, public, and philanthropic sources. However, of the $7.2bn agreed, only $220m has so far been disbursed.

The funding has boosted the production of polysilicon wafers as well as the stimulating the use and development of EUV lithography technology through a major hub in New York state and projects to develop key glass materials.

The Commerce department also leads US efforts to ensure AI systems are safe, secure, and trustworthy through scientific testing and evaluation, establishing established new institutions and frameworks to advance the science of AI safety and security through rigorous testing, evaluation, and guidelines.

Commerce established the U.S. AI Safety Institute (U.S. AISI), a scientific centre of excellence advancing the frontier of evaluating models for dual-use domains such as cyber capabilities, chemical and biological misuse risks, and software and AI development capabilities.

NIST produced first-of-its-kind voluntary industry standards for governing, understanding, measuring, and managing risks of AI systems, including the AI Risk Management Framework, and guidance on protecting against misuse from dual-use foundation models, labeling and detecting synthetic content, and more.

A workforce training investment, the $525 million Good Jobs Challenge, has 40 companies placing 53,000 workers in good-paying jobs with benefits.

The Internet for All programs are bringing every single household and small business access to affordable, reliable, high-speed Internet service by 2030. Once complete, 7.5 million currently unserved locations will be connected.

In the wake of COVID-19-related supply chain shocks, the Department of Commerce created new tools and private sector and international partnerships to protect and strengthen supply chains critical to national security.

Pandemic-era supply chain shocks revealed intolerable national security risks from the decades-long trend of offshoring and overly concentrating critical supply chains. In response, Commerce built the U.S. Government’s analytical capacity to identify and address vulnerabilities, work with partners and allies to onshore and friend-shore critical industries, strengthen domestic manufacturing, and defend the existing industrial base from non-market actors.

Commerce established a first-of-its-kind Supply Chain Centre at the International Trade Administration to shift the U.S. approach from reacting to disruptions to proactively strengthening supply chain resilience. The Centre launched the SCALE tool, a diagnostic tool that allows the U.S. Government to assess supply chain risk across the U.S. economy and prioritize critical industries and products for action.

As well as the CHIPS Act, the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL) saw investments in other parts of the supply chain that also impact on the electronics industry, with the last updates at the end of 2023. These included multiple plants for manufacturing battery materials and cells for a wide range of applications, with a focus on ensuring a supply chain for domestic production of electric vehicles, as well as solar panel materials and production.

The CHIPS Act is detailed here Investing-in-American-Competitiveness and IRA here Inflation-Reduction-Act-Guidebook