Tag: US CHIPS Act

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Electronic Components

Chips Act – Latest updates

CHIPS Act Update: New Developments and Their Potential Impact

The CHIPS and Science Act of 2022, a significant investment in US semiconductor manufacturing, continues to evolve.

During a Center for Strategic & International Studies event in February, Secretary of Commerce Gina Raimondo gave several updates on the CHIPS Act. Here’s a quick breakdown:

Funding Expectations: While the CHIPS Act allocated $52.7 billion for semiconductor manufacturing incentives, Secretary Raimondo stated in February that companies might receive less than initially requested. This emphasis on “doing more for less” aims to support a wider range of projects within the allocated budget.

Ambitious Goals: The Biden administration’s bold target was also revealed in the February update: the US aim to produce 20% of the world’s most advanced chips by 2030.

Focus on Fabs: Secretary Raimondo emphasized establishing at least two new large-scale clusters for “leading-edge logic chips” by 2030. These fabs are vital for producing the most advanced semiconductors used in various electronic devices.

The Impact: The increased domestic production of chips is expected to:

  • Reduce supply chain disruptions: This could lead to more stable product availability and potentially shorter lead times for sourcing electronic components.
  • Price fluctuations: While the long-term impact on pricing is uncertain, increased domestic production might eventually stabilize chip prices, currently subject to global market fluctuations.
  • Emerging opportunities: The CHIPS Act could foster innovation and development within the US semiconductor industry, potentially leading to the emergence of new domestic chip manufacturers and suppliers.


AI Chip Development and the CHIPS Act

The US hopes to increase its lead in the development of AI chips, and the Act’s provisions include funding for research and development efforts. This could lead to the creation of more efficient and powerful AI chips, ultimately benefiting various industries like healthcare, automotive, and consumer electronics that rely heavily on AI technology.

While the specific details of AI chip development within the CHIPS Act are still unfolding, it’s an area worth monitoring as it holds significant potential for future innovation and economic growth.

Your Partner in an Evolving Electronic Component Industry

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Electronic Components

New CHIPS Act guardrails proposed

New CHIPS Act guardrails proposed

The US Semiconductor Industry Association (SIA) has asked Commerce for more flexibility for recipients with facilities in “foreign
countries of concern” in the CHIPS Act.

The SIA published comments on 22 May, asking for a revision on a Proposed Rule of the CHIPS Act, which they say would “unduly restrict
ordinary business activities”. They also believe the Rule is much more restrictive than the goals originally set by Congress.

These “guardrails” are being introduced to prevent the improper use of CHIPS Act funding.

Funding limitations

The Act sets out that any recipients of funding are limited to how much they can invest in “foreign countries of concern”. Existing legacy
manufacturing facilities or equipment were made exempt from these regulations. The Act also states any “significant renovation” to these facilities going forward means they no longer qualify.

The SIA’s comments express concern over the new Proposed Rule’s definition of a significant renovation. Unlike the original rules put
forward, it says, the revised definition could hamper the maintenance and running of these facilities.

One of the reasons for the Act was to ease the US’s reliance on Chinese-produced semiconductors. However, according to the SIA some of the
restrictions will hold CHIPS Act recipients back from competing against other industry players.

The SIA’s response

In the SIA’s comments it says the guardrails should allow companies to maintain the “basic competitiveness” of their facilities. As it is
now, it believes the Proposed Rule would leave companies unable to even maintain facilities.

Among other recommendations, the comments also list changes to how often capacity is measured and revisions to the definition of a legacy
semiconductor.

In a statement released alongside the comments, the SIA said it looked forward to continued engagement and partnership with the Commerce
Department.

 

In comments published separately to those on the guardrails, the SIA also published comments on the advanced manufacturing investment credit regulations proposed by the Treasury Department. Both press releases are available here.

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