With President-elect Donald Trump set to take office on Jan. 20, the future of CHIPS and Science Act funding flows remains unclear as the incoming president has recently criticized the law.
Nevertheless, as we look back on 2024, the Biden administration has worked hard to finalize key investments under the law – especially with a late flurry of activity in the fourth quarter.
As of late December 2024, the Commerce Department (DoC) had announced the finalization of about $29.3 million of CHIPS and Science Act fundings – not counting numerous other proposed investments that remain subject to final negotiation. If the breakneck pace of deal closings that marked recent months is any indication, look for more definitive agreements to be announced between now and inauguration day.
President Biden signed the CHIPS and Science Act into law in August 2022, making up to $52 billion of funding available to incentivize semiconductor makers to establish new manufacturing operations in the United States.
Finalized Investments
DoC announced the finalization of the first major CHIPS award in November, marking a big win for the Biden administration in taking a major funding over the finish line.
The agency awarded TSMC Arizona Corporation up to $6.6 billion in direct funding under the CHIPS and Science Act. TSMC Arizona is a unit of Taiwan Semiconductor Manufacturing Company Limited, which is headquartered in Taiwan and has operations worldwide.
President Biden said the funding will allow TSMC “to build three state-of-the-art facilities in Arizona and create tens of thousands of jobs by the end of the decade.”
Another notable award that the DoC finalized is a $1.5 billion award to GlobalFoundries – the world’s third-largest contract chipmaker. The N.Y.-based company will use the funding to expand semiconductor production in New York and Vermont.
The Commerce Department also announced in late November that it has finalized three separate awards for Intel Corp., BAE Systems Electronic Systems, and Rocket Lab under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities.
Intel Corp. received a $7.865 billion award, BAE Systems received an award worth up to $35 million, and Rocket Lab inked its own agreement for up to $23.9 million.
“From satellites in space to defense systems on the ground, our most advanced defense and commercial technology rely on mature-node and compound semiconductors to operate,” said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology (NIST) Director Laurie Locascio. “By finalizing these awards, we are strengthening America’s domestic semiconductor supply chain resilience and broadening our manufacturing capabilities.”
DoC also announced finalized awards for Micron Technology – up to $6.165 billion in direct funding to build leading-edge memory semiconductors – and GlobalWafers Co. Ltd. – up to $406 million in funding to create semiconductor wafer operations in the United States.
Most recently, DoC also announced two finalized deals on Dec. 20. The first with Samsung Electronics worth up to $4.745 billion to bring advanced semiconductor manufacturing and research and development (R&D) to central Texas. The second with Texas Instruments worth up to $1.61 billion to help construct three new state-of-the-art semiconductor facilities.
Alongside the finalized agreements are plenty more preliminary deals that DoC has inked with other companies – and time will tell if those funding deals come to fruition.
Preliminary Deals
One of these preliminary deals includes up to $225 million for Bosch – which the Commerce Department just announced on Dec. 17. The proposed investment would support Bosch’s planned $1.9 billion investment to transform its manufacturing facility in Roseville, Calif., for production of silicon carbide power semiconductors, which are key for electric vehicles.
The Commerce Department also announced three separate preliminary agreements on Dec. 6 under the CHIPS and Science Act to provide up to $33 million in proposed direct funding to Coherent, up to $16 million in proposed direct funding to SkyWater Technology Foundry Inc., and up to $50 million in proposed direct funding to X-Fab.
“[These] three semiconductor announcements recognize that America’s innovative edge is rooted in communities like Sherman and Lubbock, Texas, and Bloomington, Minnesota. The President and Vice President’s CHIPS & Science Act is creating jobs, supporting small businesses, and securing the resilience of our supply chains all throughout the United States,” said National Economic Advisor Lael Brainard.
Another proposed investment worth keeping an eye on is to provide the Semiconductor Research Corporation Manufacturing Consortium Corporation (SRC) with $285 million to establish and operate a Manufacturing USA institute headquartered in Durham, N.C.
With combined funding totaling $1 billion, this investment will support the launch of the first-of-its-kind CHIPS Manufacturing USA Institute.
The Commerce Department said the new institute will be called SMART USA (Semiconductor Manufacturing and Advanced Research with Twins USA), and it will use digital twins approaches to greatly speed the development and validation of next-generation semiconductor manufacturing, advanced packaging, assembly, and test processes.
Stay tuned, we will be tracking the progress of these preliminary CHIPS agreements in the new year.
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