Ben Goldstein-Smith is a Senior Director at O’Neill and Associates’ Washington, D.C. office

Roughly a year and a half ago, President Biden signed the CHIPS and Science Act into law with the promise to bolster U.S. semiconductor manufacturing, research and development, and workforce training with a near $53 billion investment. Despite semiconductors being invented in the United States, domestic production has fallen to just 10% of global supply, and research and development to less than 1% of GDP.

This August will mark the two-year anniversary of the bill, yet confusion and concern surrounding the roll out of programs created by the CHIPS Act has led to a series of hearings on Capitol Hill over the last few months. Essentially, it boils down to the fact that this law created brand new programs and agencies with broad jurisdiction, and it is taking time to get it right. However, with the recognition that these technological resources and capabilities are long overdue, some of the pieces are finally falling into place while others remain a work in progress. At O’Neill and Associates we have been closely monitoring the program’s rollout and have an update on where it stands this month.

The funding from CHIPS is largely divided into two categories, the first being a $39 billion geared towards brick-and-mortar construction of facilities to manufacture semiconductors. The Department of Commerce took its first step in advancing these funds with the announcement of two CHIPS incentives opportunities. The Commercial Fabrication Facilities which was announced in February 2023 and expanded in June to include applications for the construction, expansion, or modernization of commercial facilities for semiconductor materials and equipment for which capital investment exceeds $300 million. An opportunity for projects whose capital investment falls below $300 million was announced in September of 2023 as the Small Scale Supply Chain Projects.

 The second category of funding focuses on research and development, for which the law allocated $11 billion dollars available through four integrated entities. The administration has devoted a lot of effort to getting these programs up and running over the past few months and will quickly expand throughout 2024 and beyond. If spent correctly, this money can allow companies, universities and others in the technology industry to spur a new generation of American innovation.

The Biden Administration has announced to major CHIPS R&D Programs over the past couple months. On February 8, they announced a $5 billion in the National Semiconductor Technology Center, which will be a consortium of public, private and nonprofit partners housed in its own quasi-government agency connected with the National Institute of Standards and Technology (NIST).

Additionally, on February 28^th, the first of several grant programs through the National Advanced Packaging Manufacturing Program was announced. This program promises to invest $3 billion in programs that include an advanced packaging piloting facility for validating and transitioning new technologies to U.S. manufacturers, workforce training programs to ensure that new processes and tools are capably staffed, and funding for projects. The program will be split into six investment areas, each with separate funding opportunities, including:

• Materials and Substrates
• Advances in Equipment, Tools and Processes
• Power Delivery and Thermal Management
• Photonics and Connectors
• Developing a Chiplet Ecosystem
• Co-Design of multi-chiplet subsystems with automated tools

These CHIPS R&D programs will ask the private sector to work alongside the federal government to provide insight into the research needed to scale semiconductor manufacturing properly and productively. At O’Neill and Associates, we’ll continue to help ensure that industry partners are informed of and potentially benefit from these CHIPS Act programs.