One semiconductor project is complete, and others are making progress – that’s the Government Accountability Office’s (GAO) Thursday assessment of efforts under the CHIPS Act to strengthen the domestic semiconductor supply chain.
GAO’s report outlined progress toward key project milestones for the 40 awards made to semiconductor manufacturers under the CHIPS Act. That act distributed $39 billion in incentives authorized under the 2021 National Defense Authorization Act to build, expand, or modernize semiconductor manufacturing the United States.
The semiconductor incentives program, overseen by the Commerce Department, provides support through direct funding, loans or loan guarantees to semiconductor projects that demonstrate potential to bolster U.S. economic and national security interests while addressing concerns exposed during the global chip shortage from 2020 to 2023.
“Limited domestic semiconductor capacity could dampen U.S. economic and national security interests. It could hamper innovation, especially for emerging technologies, and it presents risks to a secure supply of semiconductors for critical industries,” GAO said.
Funds could be used to develop different production stages – such as chip design, which is the most popular specialization in the United States – and for workforce development. Roughly 40 percent of awarded funds were projects focused on producing leading-edge logic chips, used in artificial intelligence and high-performance computing.
So far, 24 out of 161 milestones set across the 40 projects have been completed as of July, GAO said. Timelines for project completion extend through October 2033, and the Commerce Department has disbursed $6 billion in payments based on verified milestone completion.
The completed project is a new leading-edge fabrication facility in Arizona that was finished in June. One of Commerce’s goals for the semiconductor program was to establish at least two new large-scale clusters of leading-edge logic chip manufacturing facilities, GAO noted.
While 40 projects were given awards out of 103 applicants, Commerce officials told GAO that they are still reviewing additional applications for funding.
Commerce based its funding decisions on six criteria, giving greatest priority to projects with the greatest potential economic and national security impact. Funding amounts were set to incentivize awardees to invest their own resources and to complete projects, GAO said.
Thursday’s assessment is the first in a series GAO said it will publish on the semiconductor incentive awards, with later reports to cover project outcomes and the semiconductor industry workforce.
Boosting U.S.-made semiconductors has become a top priority for Congress, as lawmakers seek ways to secure the United States’ technological and AI dominance. However, recent trade agreements between China and the Trump administration have raised national security concerns after approving the sale of advanced U.S. chips to China.