Semiconductor Funding and Grants Supporting the Industry

Funding and grants are drastically changing the industry. Investment promises the generation of plentiful semiconductor jobs and chips with unfathomable power, and, more importantly, it looks to cement the U.S. as a leader in the industry. For this to happen, funding for research and development, manufacturing and infrastructure, and financial support for emerging technologies must be provided. 

Our guide explores how funding and grants take the semiconductor industry to new heights. 

Research and Development (R&D) Funding 

As the world begins to recognize the importance and huge potential of semiconductor devices, this year, the industry has seen substantial funding for research and development. The purpose of these global initiatives is simple: 

• Improve domestic capabilities of semiconductor production. 
• Address flaws in the semiconductor supply chain. 
• Enhance the semiconductor manufacturing process. 
• Promote the continued innovation of semiconductor technologies. 

Although the United States is in a period of presidential transition, it’s clear that semiconductor funding is a priority for administrations past and present. 

CHIPS and Science Act 2022

Signed into law by Joe Biden, this legislation represents a significant semiconductor investment. It was enacted to strengthen America’s manufacturing capabilities, galvanize national security, and encourage innovation in several tech sectors. Here’s an overview of its prime objectives relating to R&D: 

• To support semiconductor progression in the U.S., the act commits approximately $200 billion for scientific research and innovation. This figure includes funding for cutting-edge technologies such as quantum computing, artificial intelligence, and clean energy.
  
  
• This investment includes support for the National Science Foundation (NSF), which aims to help the United States maintain its position as a global leader in innovation. It will double NSF’s budget over five years, bolster fundamental research, and establish Technology, Innovation and Partnerships. 

The CHIPS and Science Act also contains several provisions that further support semiconductor funding. For example, regional technology hubs encourage local innovation and strengthen the economy by intertwining government entities, educational institutions, and businesses. 

The CHIPS Program Office (CPO) 

This component provides incentives to help rejuvenate U.S. semiconductor companies and the industry as a whole. It’s responsible for $11 billion in funding for R&D initiatives and has invested heavily in programs like the National Semiconductor Technology Center (NSTC). The CPO has announced $33.7 billion in grant awards, as well as around $28.8 billion in loans spanning 35 projects in 20 states - this is forecast to generate over 128,000 semiconductor jobs by 2030. 

Negotiations led by the Department of Commerce are ongoing to invest up to $300 in advanced packaging research projects. These include: 

• Absolics Inc. in Georgia
• Applied Materials Inc. in California
• Arizona State University in Arizona

Significant funding hopes to advance America’s leadership in substrate technology, essential for high-performance computing and AI. 

Development isn’t reserved for physical semiconductor chips. The CPO also strives to supplement the workforce. The NSTC Workforce Partner Alliance (WFPA) program wants to tackle the skills gap blighting the industry. This includes semiconductor design, manufacturing, and production. While R&D is paramount, funding in that area alone will not propel the U.S. where it aims to be. Semiconductor funding must be distributed across other aspects. 

Manufacturing and Infrastructure Support 

Improving domestic semiconductor production is considered critical in increasing America’s influence in the semiconductor industry. Therefore, the CHIPS and Science Act 2022 specifically reinforces the semiconductor manufacturing process of companies throughout the U.S. Here’s how: 

• Semiconductor Manufacturing: Around $52.7 billion is spent on semiconductor manufacturing and research, with $39 billion of that being spent on chip production in the U.S. This funding is intended to combat the decline of U.S. semiconductor manufacturing. In 1990, the U.S. accounted for 37% of global production. Today, that figure has fallen to 10%. 
  
  
• Investment Tax Credits: Incentivizing U.S semiconductor companies to expand, capital investments in semiconductor manufacturing receive a 25% tax credit. 
  
  
• Dedicated to Domestic Development: The act forbids those who receive federal semiconductor funding from expanding their manufacturing operations in China or countries that are considered to pose a threat to U.S. national security. This provision protects sensitive technologies and promotes domestic capabilities. 

Notable Companies Benefitting From Federal Funding 

As mentioned, CPO grants and loans have aided a plethora of companies. Here are some major organizations that have received investment: 

• Intel: Backed with up to $7.86 billion in funding for projects in several U.S. cities, including Arizona, New Mexico, Ohio, and Oregon. 
  
  
• TSMC: It’s been announced that TSMC is expected to be awarded up to $6.6 billion in direct funding and $5 billion worth of loans for a third leading-edge fab in Arizona. 
  
  
• Samsung: An expected injection of capital will help Samsung with a semiconductor cluster in Texas for two state-of-the-art leading-edge logic fabs, an R&D facility, an advanced packing facility, and the expansion of an existing fab. 
  
  
• Micron: Anticipating direct funding amounting to $6.14 billion to support the development of two leading-edge dynamic random-access memory fabs in New York.

State-Level Initiatives and Local Incentives 

Funding for the industry runs deeper than the federal level. Many local governments are providing extra incentives to attract semiconductor manufacturing and investment to their locations. These initiatives may be grants, tax credits, or direct investments. Here are some examples: 

• New York: A Green CHIPS program will grant U.S. semiconductor companies up to $10 billion to build environmentally-friendly semiconductor manufacturing facilities. Global Foundries will receive $575 million in tax credits and $30 million for investment in infrastructure. 
  
  
• Texas: Established the Texas Semiconductor Innovation Fund (TSIF) with $698.3 million designated for semiconductor manufacturing and design projects. 
  
  
• Oregon: The Oregon Senate Bill 4 developed an Oregon CHIPS Fund with $240 million for grants and loans for U.S. semiconductor companies. 
  
  
• Colorado: Offering refundable tax credits that will be made through the 2028-2029 fiscal year. Microchip, a semiconductor manufacturing company, applied and expects to receive $22.6 million in tax credits.

Collectively, federal and state funding is forecast to increase U.S. production of leading-edge chips to almost 30% of the global supply by 2032. 

Funding for Emerging Technology 

Increasing the power and reducing the size of semiconductor devices is a shared ambition of the industry. For this to materialize, there must be strategic investment into the latest technologies that U.S. semiconductor companies can leverage. Let’s take a look at the innovations that, with funding, will strengthen the future of the semiconductor industry. 

Artificial Intelligence and Machine Learning (AI and ML)

AI and ML are reshaping the industry by elevating a multitude of key aspects of semiconductor production. This includes semiconductor design, manufacturing, and testing processes. Here’s an overview of how this pioneering tech is refining processes: 

Design and Verification 

• Design Automation and Optimization: AI can automate semiconductor design, meaning it’s possible to optimize circuits for timing, power, and area more efficiently than manual methods. This speeds up the process and improves semiconductor devices’ performance. 
  
  
• Generative AI in Design: Semiconductor design benefits from generative AI applications by automating language and code-related tasks - this increases productivity and decreases design cycles. 

Manufacturing 

• Yield Optimization: AI can be deployed to analyze data throughout the semiconductor manufacturing process to identify anomalies impacting yield. Manufacturers can rectify the causes and maximize chip production. 
  
  
• Predictive Maintenance: ML models can predict semiconductor manufacturing equipment failure before it happens. This capability can increase equipment uptime by 10-20%. 

Testing and Quality Control 

• Detecting Defects: AI can identify flaws during production by studying images and data from the semiconductor manufacturing process. 
  
  
• Quality Control: AI-enabled systems can improve quality control by analyzing data from sensors to ensure semiconductor chips satisfy quality standards. 

Quantum Computing 

Quantum computing is a technology that’s considered to be the pinnacle of computational power. The combination of quantum mechanics and semiconductor technology is transforming the industry. Advanced semiconductor devices are required for quantum computing to fulfill its potential. Here’s how the industry is supporting this field: 

• Material Selection: Semiconductor materials are frequently used for quantum computing research. The industry is developing materials like silicon-germanium for qubits and utilizing advanced manufacturing methods like extreme ultraviolet lithography to create precise quantum components.
  
  
• Room Temperature Quantum Computing: Using semiconductor devices has made it possible to operate quantum computers at room temperature, which is an important step for commercialization. 
  
  
• Quantum Dot Technology: Semiconductor quantum dots are being leveraged to confine single electrons. This creates an exciting opportunity for qubit implementation. The quantum dots market is predicted to reach $10.6 billion by 2025. 

Final Say: Semiconductor Funding and Grants Supporting the Industry

Investments in semiconductor research and development clearly indicate that the U.S. wants to be a global leader in the industry. Legislation such as the CHIPS and Science Act 2022 has resulted in federal and state funding that could lead to the creation of thousands of semiconductor jobs. 

There’s also been generous investment in semiconductor manufacturing and infrastructure as it’s a priority for the U.S. to boost domestic production of semiconductor devices. Several companies have already benefited from investment, such as Intel, TSMC, and Micron. 

Emerging technologies such as AI and quantum computing have the scope to drive the semiconductor industry further forward. With funding, the latest tech advancements could optimize chip design and improve performance. Semiconductor funding is imperative for the development of quantum computing. With a concentrated collaboration, the U.S. semiconductor industry could solidify itself as a global leader. 

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