Hold On For Just One Second!

Before you leave, how about subscribing to iGR Opinion, our regular industry newsletter?

Communications Infrastructure

Policy and Politics

Upping the Ante on Chips

February 15, 2023 | Last summer, Congress passed the bipartisan CHIPS and Science Act (for the curious, in full the “Creating Helpful Incentives to Produce Semiconductors for America Act”), a bonanza of spending to address U.S. vulnerability in the semiconductor space. According to the Department of Commerce, shortages of semiconductors dented U.S. economic growth by nearly a quarter-trillion dollars in 2021, and the Commerce Secretary has made it a key part of her agenda to expand domestic manufacturing of mature and advanced semiconductors.

The CHIPs Act is a huge down payment toward that goal. All in, it will provide $54.2 billion in funding for the semiconductor and wireless industries, including $52 billion in grants and incentives specifically designed to boost investment in U.S. semiconductor manufacturing facilities. This level of funding has been characterized as the largest government intervention in industrial policy ever, exceeding both the government investments in vaccine development (project “Warp Speed”) and the GM bail-out. But even at this level, U.S. investment lags the level of investment China has allocated to semiconductor technologies and manufacturing.

Last week, the Commerce Department — which will helm the CHIPs program — released a new roadmap of its plans, identifying anticipated deadlines for anyone wanting to compete for the dollars. Specifically, DoC announced a “notice of funding opportunity,” or NOFO will be released later this month that will apply to all types of commercial chip fabrication, and will include opportunities to obtain funding for both manufacturing and packaging facilities. The NOFO will kick off what will no doubt be a very competitive and active application process.

DoC plans to release another funding opportunity in late spring for suppliers of semiconductor equipment and materials and, by early fall, a third NOFO is expected that will address construction of semiconductor research facilities, designed to strengthen chip manufacturing capabilities.

Activity is also underway at NIST in support of the also-funded National Semiconductor Technology Center, which will coordinate the government’s semiconductor R&D activity in conjunction with the private sector/academia. A NIST white paper laying out the broad contours of the NSTC is expected to be released by the end of March. In short, the next number of months will see a steady stream of activity critical to how the CHIPs dollars flow and who will get a slice of the action.

At the middle of it all sits DoC Secretary Gina Raimondo, who’s impact and influence inside DC continues to grow. On February 23rd, she is expected to speak directly to how the agency will approach this historic pot of government subsidies seen as essential to the future of U.S. long-term national security interests and economic competitiveness.

And when these dollars start rolling out, don’t expect that only the traditional industry players will be looking to participate. Lobbying disclosures for this program have been amping up, with Google and Meta both building a presence. Last week Snap also retained expertise to get into the game.

In the meantime, the Chip lobby has been making clear that this historic funding may not be enough. The Semiconductor Industry Association (SIA) has already released a report designed to pave the way for a second round of subsidies targeting support of microchip design. While the U.S. currently enjoys a dominant position in chip design, SIA has warned that “design leadership is not guaranteed.” SIA is calling for another $20 to $30 billion between now and 2030, most of which would fund research tax credits to shore up U.S. leadership in design R & D.

The game is on and the stakes are big. There will be much to watch over the coming months as the players come to the CHIPs table, all vying for a piece of the action.

Bonus Round: Spectrum Update

I previously reported on the near miss on a spectrum package as part of last December’s omnibus bill. The deal fell apart when Sen. Mike Rounds raised concerns about impact on DoD’s control over certain mid-band spectrum assets.

With the FCC’s spectrum auction authority set to expire on March 9th, there’s little evidence to date that a new deal is coming. To the contrary, Sen. Rounds is reportedly trying to gather greater support for his opposition.

At a recent event, the new House E & C Chair, Cathy McMorris Rodgers, acknowledged that it was important to reach an agreement as soon as possible: “No one wants to see the auction authority expire.”

But McMorris Rodgers gave no indication of progress on a new package. If the authority is allowed to lapse, that will not bode well for the prospects of an effective bicameral approach to national spectrum policy in the 118th Congress.

Our Latest Research

Copyright © 2024 iGR. All Rights Reserved.
Website designed, built, maintained & hosted
by Graphite Design