The Department of Commerce has released new application materials and other resources for the first CHIPS for America funding opportunity for various types of semiconductor fabrication facilities. Commerce has also posted full application materials for applicants seeking incentives for leading-edge facilities.
The Department is asking applicants to submit detailed applications so that it has all the information it needs to evaluate applications and plan awards across the semiconductor ecosystem. This will include financial models that will help reviewers evaluate the commercial viability and financial strength of projects and ensure the application is emphasizing important program priorities such as activating third party capital and customer commitments.
The Biden administration announced the release of first CHIPS for America funding opportunity for semiconductor manufacturing incentives. Administered by National Institute of Standards and Technology within the Department of Commerce, the CHIPS for America program was established by the CHIPS and Science Act of 2022.
The vision statement sets out four major goals for the CHIPS program by the end of decade: 1. make the U.S. home to at least two, new large-scale clusters of leading-edge logic chip fabs, 2. make the U.S. home to multiple, high-volume advanced packaging facilities, 3. produce high-volume leading-edge memory chips, and 4. increase production capacity for current-generation and mature-node chips, especially for critical domestic industries.
The funding opportunity is the first in a series to be released under the CHIPS program. According to a new release by the administration, Commerce will release a funding opportunity for semiconductor materials and equipment facilities in the late spring of 2023, and one for research and development facilities in the fall.
Applications will be accepted on a rolling basis beginning with leading-edge facilities with applicants able to submit optional pre-applications starting immediately and full applications starting March 31, 2023. For current-generation, mature-node, and back-end production facilities, pre-applications will be accepted on a rolling basis beginning May 1, 2023, and full applications will be accepted on a rolling basis beginning June 26, 2023. While optional, pre-applications are recommended according the Department.
The CHIPS and Science Act is one of the most significant pieces of science legislation in years. With $180 billion for research and development over the next five years, it aims to bolster the semiconductor industry as well as federal science agencies like the National Science Foundation and Department of Energy. But now comes what many observers view as the hardest part: not only must the money be appropriated, but the act must be implemented in a way that meets its many objectives. In the journal Issues in Science and Technology, several experts explore the ways the CHIPS and Science Act can deliver on its promises to spur innovation, strengthen regional economies and workforce, and promote US competitiveness. In addition, there will be a webinar on November 1st at 3 p.m. where these experts discuss how implementation of this important legislation can best meet—and balance—its many goals.
The DoC confirmed that there is a significant, persistent mismatch in supply and demand for chips, and survey respondents did not see the problem going away in the next six months. Median demand for the chips highlighted by the buyers who responded to the RFI was as much as 17% higher in 2021 than in 2019, and buyers aren’t seeing commensurate increases in the supply they receive.
The main bottleneck identified is the need for additional manufacturing or fab capacity. In addition, companies identified material and assembly, test, and packaging capacity as bottlenecks.
The RFI received more than 150 responses, including from nearly every major semiconductor producer and from companies in multiple consuming industries.
Other findings include:
The median inventory of semiconductor products highlighted by buyers has fallen from 40 days in 2019 to less than 5 days in 2021 (see Figure 2). These inventories are even smaller in key industries.
The RFI allowed us to pinpoint specific nodes where the supply and demand mismatch is most acute, and we will target our efforts moving forward on collaborating with industry to resolve bottlenecks in these nodes.
The primary bottleneck across the board appears to be wafer production capacity, which requires a longer-term solution.
DoC urged passage of semiconductor legislation pending in Congress — the United States Innovation and Competition Act (USICA) including $52 billion in funding to support domestic chip manufacturing. That legislation remains stalled due to disagreements between the House and the Senate as well as a slowdown in annual appropriations across all agencies.