U.S. Commerce Secretary Gina Raimondo said today that over 600 semiconductor companies have requested more than $70 billion under the CHIPS and Science Act, meaning that the Department of Commerce (DoC) has “a lot of tough conversations” ahead to narrow down which companies receive funding.
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.
However, during remarks at the Center for Strategic and International Studies in Washington, D.C., today, Raimondo said that the demand outweighs the current funding supply.
“We’ve received over 600 statements of interest from companies, from the biggest to the smallest, and the brutal reality is that a significant majority of those companies expressing interest aren’t going to receive funding, including many excellent proposals by strong companies that are worthy,” Raimondo said.
“At the outset, we said we would invest about $28 billion of the program’s $39 billion in incentives for leading-edge chip manufacturing,” she explained. “But I want you to know, even though that sounds like a lot of money, the leading-edge companies alone have requested more than $70 billion, so that means we have a lot of tough conversations.”
Raimondo said that these tough conversations include telling major chip companies “to do more with less,” because the Commerce secretary said she is “obsessed with protecting taxpayer money.” For instance, if a company is asking for billions of dollars, “I tell them: ‘You will be lucky to get half of that.’”
In order to make every dollar count, Raimondo announced today that the Department of Commerce is now prioritizing chip projects that will be operational by 2030.
“We want to maximize our impact in this decade. It’s not responsible to give money to a project that will come online 10 or 12 years from now if it means saying no to excellent projects that could come online this year,” Raimondo said. “This is tough stuff. None of this work is easy.”
Nevertheless, the secretary explained that DoC is making these tough decisions because it’s much riskier to continue to be reliant on other countries such as China for semiconductor chips.
Last year, Raimondo said that the department set a goal to make the United States home to at least two new large-scale clusters of leading-edge logic chip fabricators. Today, she announced that DoC expects “to exceed that target.”
“The way industry has responded, I think we’re going to do better than what we told you we would do a year ago. We think our investments in leading-edge logic chip manufacturing will put this country on track to produce roughly 20 percent of the world’s leading-edge logic chips by the end of the decade,” Raimondo said. “That’s a big deal. Why is that a big deal? Because folks, today we’re at zero.”
“By 2030, the United States of America will be the only country in the world where new chip architectures can be invented in our new research labs,” she added. “They’ll be designed in the United States for every end-use application you can think of, manufactured at scale in the United States by well-paid American workers, and packaged with the most advanced technology in the world. All on our shores … We’re going to make building hardware sexy again.”
