New Senate Bill Proposes to Pump $25 Billion Into U.S. Semiconductor Industry

July 03, 2020 by Jake Hertz

Known as the American Foundries Act of 2020, this bill will award grants for microelectronics manufacturing, defense, and R&D. What does this mean for U.S.-based EEs?

Last week, a bill was introduced in the Senate to increase spending in the American semiconductor industry by as much as $25 billion. Significantly, this bill comes only several weeks after the CHIPS for America Act was proposed. This latter act would earmark $22 billion for U.S. semiconductor growth as well, focusing primarily on manufacturing. 


Close up of a computer chip

The government hopes to increase manufacturing and R&D in the semiconductor industry. Image used courtesy of Getty and Forbes

Supported by senators from both major political parties, the most recent bill—termed the American Foundries Act of 2020—shows the growing importance of the semiconductor industry to the American economy. 


What the American Foundries Act of 2020 Entails

According to Forbes contributor Willy Shih, the American Foundries Act of 2020 outlines several ways to allocate $25 billion:

  • $15 billion to manufacturing, including creating more foundries on American soil
  • $5 billion to defense
  • $5 billion to research and development, split between DARPA, NSF, DoE, and NIST


Recent Investments in Semiconductor Manufacturing

While this news is significant, it isn’t the first time in recent history that the government has looked to invest in increased semiconductor manufacturing. In a recent article, AAC contributor Gary Elinoff writes that within the past couple of months, the government has been in talks with Intel, TSMC, and Samsung to build foundries in the U.S


Inside an Intel foundry

Inside an Intel foundry. Image used courtesy of Intel


TSMC responded to this call for U.S.-based chip factories, announcing plans to build a $12 billion foundry in Arizona. This initiative, which is estimated to be completed in 2029, is forecasted to create 1,600 jobs.


What This Means for U.S.-Based Engineers

Last year, 78% of cutting-edge wafer fabrication capacity was based in Asia, making it the first year that North America fell behind China. Bringing this capacity back to American soil is good news for U.S.-based EEs. 

Invariably, investing more money into the industry means more jobs will be available for engineers to fill. While the majority of the money is being invested into the manufacturing side, these jobs still require the expertise of engineers. On top of that, $10 billion dollars would be allocated between defense and R&D, which will open up jobs for engineers looking to work in these fields. 


Global wafer capacity in 2018 by geographic region

Global wafer capacity in 2018 by geographic region. Image used courtesy of IC Insights 

Furthermore, the supply chain engineers will be interacting with will be changed. In an ideal world, bringing manufacturing to U.S. soil should decrease turnaround times and speed up time to market.


A Robust Silicon Presence

Making the U.S. a prominent presence in the semiconductor industry is clearly a major goal for the federal government. Bipartisan support indicates a sense of mutual agreement in the importance of robust domestic innovations at the silicon level. 

This news also is a harbinger of good things to come, reassuring engineers that this is a growing field. Hopefully, this investment will increase innovation and provide the world with new leading-edge technologies.



How has your work as a design engineer been affected by oversea supply chains? Have you been affected by COVID-19 related disruptions? Share your experiences in the comments below.