Advanced semiconductor companies in the U.S. have requested over double the available federal funds for projects aimed at bringing chip manufacturing back to American soil, according to Commerce Secretary Gina Raimondo.
Leading-edge firms such as Intel Corp., Taiwan Semiconductor Manufacturing Co., and Samsung Electronics Co. are seeking more than $70 billion from the 2022 Chips Act, Raimondo revealed during remarks at the Center for Strategic and International Studies in Washington.
The Chips Act, which was passed to revitalize U.S. semiconductor manufacturing after years of production overseas, allocated $39 billion in grants along with $75 billion in loans and loan guarantees. Raimondo stated that the Commerce Department intends to utilize $28 billion of the $39 billion pool for leading-edge facilities.
Intel is reportedly in discussions with President Joe Biden’s administration for over $10 billion in incentives through grants and loans. Major awards, including Intel’s, are expected to be announced by the end of March.
Additionally, Raimondo announced that her department will surpass a minimum spending threshold of $2 billion on older-generation chips, which remain crucial to the global economy. The agency has already disclosed three awards totaling more than $1.5 billion to companies producing these mature semiconductor models.
More than 600 firms have shown interest in the program, Raimondo noted, highlighting the challenge of having to decline excellent companies. The agency plans to prioritize smaller grants for smaller applicants while also considering multi-billion dollar awards for industry giants. Projects expected to be completed by 2030 will receive preference.
Raimondo emphasized that chip companies have already invested over $200 billion in the U.S. before any federal funding was allocated. The announced awards are preliminary and subject to additional due diligence, with disbursements contingent on companies meeting negotiated benchmarks over time.
Overall, the U.S. aims to produce 20% of the world’s advanced logic chips by the end of the decade. Raimondo expressed confidence in the funding allocated by the Chips Act to achieve this goal, though she acknowledged the possibility of needing additional funding in the future, commonly referred to as a Chips Two.