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Home Industrial: Technology, News & Trends U.S. Commerce Secretary: 600+ Chip Subsidy Requests, Most Face Rejection!

U.S. Commerce Secretary: 600+ Chip Subsidy Requests, Most Face Rejection!

Commerce secretary

According to the latest reports, the U.S. Department of Commerce website officially released the speech of the U.S. Secretary of Commerce Gina Raimondo, disclosed the latest implementation of the U.S. Chip and Science Act: Although there are more than 600 applications for chip subsidies, most of them will not get the funds. This is also the same as Core Intelligence’s previous prediction that only a few headline companies will receive subsidies.

In August 2022, U.S. President Joe Biden officially signed the Chips and Science Act of 2022 at the White House, making it an official bill. The Act will provide approximately $52.7 billion in government subsidies for U.S.-based semiconductor production and research, and more than $200 billion to stimulate innovation and development in other U.S. science and technology fields, to enhance U.S. competitiveness in the field of science and technology.

In this $52.7 billion in subsidies, there will be $39 billion in direct subsidies to subsidize the chip manufacturing industry, of which $37 billion will be used to subsidize the construction of advanced process fabs to promote the United States into the economy and national security interests. In addition, the U.S. government will also provide for the relevant chip manufacturers to provide $75 billion in loans and loan guarantee support. Aim to revive the United States semiconductor manufacturing industry, the establishment of an independent semiconductor supply ecosystem.

Raimondo in February last year, the U.S. Department of Commerce launched the “CHIPS for America” program of funding applications at the time of the “our efforts reflect the space race – I’m serious “.

In his latest remarks, Raimondo went on to note that “President Kennedy’s historic call for a manned landing on the moon inspired an unprecedented effort by the government, the private sector, and academia to secure America’s place at the forefront of innovation. Now, sixty years later, President Biden is calling on us to unite around a common goal so that we can once again solidify our position as the global technology leader in this industry.”

Our modern world is powered by semiconductors. From windscreen wipers to mobile phones, from pacemakers to rocket ships, chips are vital to every aspect of our lives and economy. Now, on top of that, artificial intelligence has become a game-changer, driving incredible demand for cutting-edge chips.

When Congress debated the Chip and Science Act a few years ago, the term “generative AI” didn’t even exist in our vocabulary. Now, it’s everywhere. It takes tens of thousands of leading-edge chips to train a cutting-edge AI model.

Raimondo points out that “US companies are currently the world leaders in advancing AI, dominating the design of AI chips and the development of large-scale language models. But we don’t make or package any of the cutting-edge AI chips needed to drive the innovation ecosystem and power our most critical defense systems. We cannot build next-generation technology leadership on such a precarious foundation. We need more talent development, R&D, and manufacturing in the United States. At the same time, other countries like China are taking an increasingly aggressive approach to chip production. If we want to continue to lead in artificial intelligence and other core technologies, then we must successfully implement the Chip Act and ensure that our vision is bold enough.”

When the Chip Act was introduced a year ago, a set of evaluation criteria was established. First, to see if a reliable and resilient semiconductor industry can be built to enhance U.S. technological leadership; second, whether it can manage taxpayer funds.

In response, Raimondo said, “I want to tell you that we are achieving both goals. The U.S. Department of Commerce has developed a flexible, fast, world-class program in record time. We have built an exceptional team of more than 200 people with decades of experience in government, academia, and industry, investment backgrounds, technical and policy expertise, and a proven track record of delivering large-scale projects.”

According to the report, private companies have announced nearly $200 billion in semiconductor manufacturing investments since President Biden signed the Chip and Science Act. At least nine states have developed new economic development plans for the semiconductor industry to provide matching funds and further leverage the law.19 More than 50 community colleges in 19 states have announced new or expanded programs to support opportunities in the semiconductor industry. The U.S. Department of Commerce is also working with labor leaders and manufacturers to train workers and build the pipeline needed to operate new semiconductor factories and meet workforce goals.

At the same time, the plan has spurred the U.S. Department of Commerce to work with academia, labor organizations, government research agencies, entrepreneurs, and industry to establish the National Semiconductor Technology Center, which will address the R&D challenges facing the U.S. chip manufacturing ecosystem and expand the strong, skilled workforce needed to power it. A week ago, well-known industry veteran Deirdre Hanford was announced as the project’s CEO.

However, the latest revelations about Chip Act subsidy applications and disbursements show that the $39 billion in semiconductor manufacturing subsidies is far from enough.

Chip industry

Although the “Chip and Science Act” for the chip manufacturing industry to provide $ 39 billion in subsidies seems quite a lot cutting-edge process fab construction costs have now exceeded $ 20 billion, not to mention the faces of Intel, TSMC, Samsung, Gerber, Micron, and many other semiconductor manufacturers in the U.S. investment in the plan to build factories, there will undoubtedly be “! The situation of “too many monks, too little gruel”.

Raimondo pointed out in his latest speech: “The U.S. Department of Commerce has received more than 600 applications for subsidies letter of intent, but the reality is that the vast majority of those who expressed interest will not get the funds – including many excellent companies to put forward a strong proposal. I have also said many times that the purpose of this program is never to provide the semiconductor industry with every dollar it needs; it is to provide the semiconductor industry with every dollar it needs. It is to make targeted investments for our national security objectives.”

“Originally, the U.S. Department of Commerce was expected to invest approximately $28 billion in incentives for cutting-edge chip manufacturing out of the $39 billion in incentives planned under this Chip Act. But leading semiconductor companies alone are asking for more than $70 billion, which means we’re having a lot of tough conversations.” Raimondo said.

As an example, Raimondo said his conversations with each CEO went something like this: They’re asking for billions of dollars. I look across the table at them and say, “You’ll be lucky if you get half of that.” When they came in the next time and learned that they were getting less than half, they all told me, “Minister, I don’t feel very lucky.”

The reality is that there is limited subsidy money available from the United States, and the stated goals to be achieved are urgent and difficult. Therefore, every dollar must be fully utilized.

Raimondo announced, “We have decided to prioritize projects that will be operational by 2030. To maximize our impact during this decade, we have rejected some worthy proposals that were planned to come online after 2030.”

“We can’t afford to be overly dependent on one part of the world for the most important hardware of the 21st century – that’s far more dangerous. Last year, I said that the U.S. goal is to have at least two new large clusters of cutting-edge logic factories built by a highly skilled workforce, each employing thousands of workers in high-paying jobs. Now, we expect our investments to exceed that goal.” Raimondo was very pleased to say, “We expect that by 2030, our investment in cutting-edge logic chip manufacturing will enable us to produce about 20 percent of the world’s cutting-edge logic chips, compared to about zero at present. This means that our manufacturing capabilities and supply chain will no longer be as vulnerable to geopolitical challenges as they are today.”

Raimondo further noted, “In addition to leading-edge logic, leading-edge memory is a key input to AI systems. Our goal is to mass produce cost-competitive, cutting-edge memory in the United States. I believe the U.S. can be home to the entire silicon supply chain for producing cutting-edge chips – from polysilicon production to wafer fabrication to manufacturing to advanced packaging.”

In addition to the focus on cutting-edge advanced processes, Raimondo also said that the importance of current-generation and mature node chips, which are critical for automobiles, defense systems, medical devices, and critical infrastructure, cannot be ignored. The pandemic has exposed the vulnerability of these supply chains.

To date, the U.S. Department of Commerce has announced three investments in existing mature chip companies: BAE, Microchip, and Global Foundries, and subsequent announcements of additional investments in current mature production are expected to continue, providing a reliable U.S. domestic source for these critical chips.

Raimondo was excited to say that if the U.S. Chip Act program is successful and I believe it will be by the end of the century, the U.S. will be the only country in the world that can invent new chips as part of our new research. By the end of the century, the United States will be the only national laboratory in the world that can invent new chip architectures in our new research, designed for every end-use application, manufactured on a large scale by well-paid American workers, and packaged using our state-of-the-art domestic technology.

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