As CHIPS+ Act Moves Ahead, Chipmakers Follow Suit With New Fabs
With the go-ahead for the CHIPS+ Act in place, manufacturers are laying down plans for U.S. fab sites.
Today, the Senate officially passed bipartisan legislation to buoy the U.S. semiconductor industry in an attempt to compete with China. The CHIPS Act, which has been renamed the CHIPS and Science, or CHIPS+ Act, includes $52 billion for U.S. chipmakers to ramp up production while also granting tax credit for such manufacturing. The legislation also provides funding to increase research and development within the semiconductor industry.
Cleanroom in a semiconductor manufacturing facility. Image used courtesy of SkyWater Technology
Now, the bill awaits House approval before heading to the White House for President Joe Biden's sign-off before Congress leaves town in August.
Why the Wait?
Since it first rolled out, the CHIPS Act outlined goals to reinstate the U.S. semiconductor industry as one of the top global chip suppliers and create more domestic autonomy. As supply chains hit a bottleneck during the pandemic, the U.S. semiconductor industry struggled to procure advanced chips at home, putting China at an advantage.
The road to alleviating the chip shortage hasn't been smooth-sailing with the CHIPS Act at a standstill in Congress. Manufacturers' enthusiasm matched the actual funding; new fabs were as fast to sprout as grant dollars were available.
The section-by-section summary of the CHIPS+ Act outlines investment focuses on science, space exploration, and STEM engagement, among others. Image used courtesy of the U.S. Senate Committee on Commerce, Science, and Transportation
This week, the Senate approved a slimmed-down version of the bill, removing a significant hurdle to producing more chips on U.S. soil. The act includes a significant cutback, however. Instead of the initial $250 billion, the latest legislative act lowers the sum to $52 billion for chip production subsidies and tax breaks for opening new U.S. based-plants.
CHIPS Act to Strengthen Chipmaking on U.S. Soil
The idea driving the CHIPS+ Act was to pull more electronics manufacturing resources into the national economy, including advanced chipmaking technologies, engineering talent, and fab foundries. So far, the success of the CHIPS+ Act has been partial. With only a fifth of the initially proposed sum on offer, not every semiconductor supplier will meet its expansion goals.
In 2020, the U.S. government asked Intel, TSMC, and Samsung to build U.S.-based chip factories—with TSMC being the first to respond with an announcement of a $12 billion chip factory in Arizona. Intel also announced plans for a $20-million investment into a new Ohio foundry but quickly pulled back when Congress hadn’t delivered on promises fast enough.
Intel's prospective chipmaking site in Licking County, Ohio. Image used courtesy of Intel
SkyWater Announces New Indiana Facility
Another U.S. chipmaker, SkyWater Technology, partnered with the state of Indiana and Purdue University to build a $1.8 billion U.S. semiconductor R&D and production facility in the Discovery Park District on Purdue Campus. SkyWater has a similar experience in lending its development services and integration solutions to Minnesota and Florida, and the proximity of Purdue research facilities is a plus that would lay the groundwork for new fab foundries.
Samsung Plans Nearly a Dozen Texas Foundries
Samsung is also keen to invest more in facilities, provided the company gets a boost from the CHIPS+ Act tax breaks. The South Korean manufacturer has submitted an ambitious plan, which, if realized in full, would be worth $192.1 billion and create 10,000 new jobs. Samsung plans to build a total of 11 new foundries in Central Texas in the next 20 years. The city of Taylor has been chosen as the site for the first foundry, which should be finished by 2034. Austin is next.
Samsung's existing operations in Austin, Texas. Image used courtesy of Jay Janner/The American-Statesman
Reportedly, the new fab will use EUV (extreme ultraviolet) lithography technology. A bonus that could help Samsung follow through with the potential investment is its already well-established infrastructure in Austin and access to the capital city’s talented workforce.
GlobiTech Also Eyes Texas for Wafer Fab
Texas has been an attractive option for another advanced semiconductor manufacturer. GlobiTech, a subsidiary of the Taiwan-based GlobalWafers, plans to build a modern 300-mm wafer fab in Sherman, Greyson County. The total investment plan to take place in North Texas costs ~$3.4 billion and the production is expected to start as early as 2025 with volumes that could eventually reach 1.2 million silicon wafers per month.
The Next Moves for the CHIPS+ Act
Future steps depend on how the CHIPS+ Act will be funded and the fate of the more comprehensive U.S. Innovation and Competition Act (USICA). In the meantime, the U.S. semiconductor industry is turning to other avenues to increase production years down the line. These avenues include opening new semiconductor specialties at university programs, funding lab research, and rethinking current manufacturing processes.