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Strengthening Semiconductor Supply Chains

June 28, 2023
As part of its Investing in America Agenda mission, the Biden-Harris Administration lays out a new plan for strengthening the semiconductor supply chain.

The COVID-19 pandemic, geopolitical tensions, increased demand and numerous natural disasters have all negatively impacted global semiconductor supply chains at some point over the last few years. As a results, chip prices have increased and some semiconductors have been difficult for buyers to source.

As manufacturers and distributors continue to work through these and other issues, governments are also stepping in to help. Most recently, the U.S. Department of Commerce shared the Biden-Harris Administration’s strategic vision to strengthen the semiconductor supply chain through CHIPS for America investments. 

Revitalizing the Domestic Chip Industry
As part of the CHIPS and Science Act, the Department of Commerce is overseeing more than $50 billion to revitalize the U.S. semiconductor industry, including $39 billion in semiconductor manufacturing incentives. The first funding opportunity seeks applications for projects to construct, expand or modernize commercial facilities for the production of leading-edge, current-generation and mature-node semiconductors.

The U.S. Department of Commerce’s CHIPS Program Office is releasing two funding opportunities for the semiconductor supply chain. Released in June, the first expands the funding opportunity released in February 2023 to accept applications for the construction, expansion or modernization of semiconductor materials and manufacturing equipment facilities for which the total capital investment equals or exceeds $300 million.

The second, to be released in the fall of 2023, will cover semiconductor materials and manufacturing equipment facilities with total capital investments under $300 million.

“After the pandemic exposed holes and bottlenecks in our semiconductor supply chains that sent shockwaves across our economy, the CHIPS and Science Act is a historic opportunity to ensure our microchip supply chain resilience,” said Secretary of Commerce Gina Raimondo, in a press release

A Vision for Success
The National Institute of Standards and Technology (NIST) also just released its “Vision for Success,” which outlines strategic objectives for investments in the semiconductor supply chain based on these three core goals: 

  • Strengthening supply chain resilience—e.g., by reducing chokepoint risks flowing from the geographic concentration of critical semiconductor inputs. 
  • Advancing U.S. technology leadership—e.g., by incentivizing major U.S. manufacturing equipment and materials suppliers to increase their footprints in the United States and attracting non-U.S. suppliers of the world’s most advanced equipment, materials and subsystems to establish large-scale footprints here.
  •  Supporting vibrant U.S. fab clusters—e.g., by ensuring that each CHIPS-funded cluster is supported by an ecosystem of reliable suppliers.   

“The semiconductor supply chain is global, specialized and interconnected. Chipmakers do business with thousands of individual suppliers that provide the highly complex materials and tools used to produce semiconductors,” the NIST explains in its report. “Often, even the biggest chipmakers lack full visibility into their entire supply chain.”

Advancing U.S. Tech Leadership
As part of its mission, the NIST also wants to help advance U.S. technology leadership as a whole. To get there, the group will help major U.S. semiconductor manufacturing equipment and materials suppliers increase their footprints in the United States, thus reinforcing American technology leadership in the supply chain.

“In addition,” the NIST adds, “non-U.S. suppliers of the world’s most advanced semiconductor manufacturing equipment, materials and subsystems will establish large-scale footprints in the United States for the first time, contributing to and benefiting from the domestic innovation ecosystem and bringing new strategic capabilities and know-how to the United States.” 

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