US government seeking a CHIPS Act 2.0 to properly fund domestic semiconductor industry

[Alfonso Maruccia]

Money Money Money: The CHIPS and Science Act was officially signed into law on August 9, 2022, authorizing around $280 billion in federal subsidies to boost domestic research and manufacturing of advanced semiconductor technology. The United States Secretary of Commerce says that the nearly $300 billion is still insufficient to achieve world dominance in the field.

Speaking at Intel's recent foundry event, United States Secretary of Commerce (SecCom) Gina Raimondo said that federal subsidies are essential for the US to become a new world power in microchip technology. Bloomberg notes that the SecCom believes the US likely needs to prepare a second CHIPS Act to keep funding domestic initiatives in the semiconductor business.

"I suspect there will have to be – whether you call it Chips Two or something else – continued investment if we want to lead the world," Raimondo said in her speech on Wednesday. "We fell pretty far. We took our eye off the ball."

SecCom recently spoke with OpenAI CEO Sam Altman, who is seeking federal subsidies to build a new chip venture. Demand for AI chips is increasing, Raimondo said, and it will soon become overwhelming for even the most prominent foundry operations in the world.

New investments and a potential new CHIPS Act could help build new US chip foundries and semiconductor startups. Aside from fulfilling the ever-growing demand for AI accelerators, the additional funds would lead to a surplus of specialized chips, enabling more companies to use artificial intelligence algorithms and services.

More AI chips and companies using AI for their business would provide a competitive advantage for the US – at least, that's Raimondo's theory. The US government still hasn't allocated or delivered the billions of dollars already funded with the original CHIPS Act. Washington recently announced a $5 billion investment to finance a new chip research initiative (NSTC), while Nvidia CEO Jensen Huang predicted that the US could achieve chip manufacturing independence in 20 years.

The US CHIPS Act forced other world powers to prepare similar plans to fund domestic semiconductor initiatives. Europe promised to invest €43 billion ($46.53 billion) in its version of the Chips Act to boost the Old Continent's competitiveness and resilience in the microchip business.

So far, Washington has only allocated $39 billion in direct funding and $75 billion in loans and loan guarantees to help domestic chip manufacturing – a little over one-third of the allocated funds. The first major players in the semiconductor industry to receive these subsidies include the US subsidiary of British contractor BAE Systems, GlobalFoundries, and Microchip Technology. Intel is also trying to get its slice of the state funding cake, with a new announcement expected soon.

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https://www.techspot.com/news/101993-us-government-seeking-additional-chips-act-properly-fund.html

 

[yRaz]

Bring it on! With the size of the labor market currently, I'll be retired before the first chips act runs out of funding! There is currently a great migration of tradesmen moving to the southwest to build all this stuff and, frankly, I'm tired of working in the northeast US. Most of these projects are in Arizona, Utah, New Mexico and Nevada. They aren't just using these funds to build foundries, but entire cities around them. Tons of this money is going towards building housing, roads, shopping centers and other supportive infustructure. What's the point of building a chip foundry if noone can flush a toilet in a 100mile radius?

 

[GodisanAtheist]

Like food and energy are "strategically vital industries" to the US, we need to start treating tech/semiconductors the same.

We subsidize farmers to ensure there is always a steady supply of food available on the market (although those corn subsidies have resulted in corn syrup in all the things), we pass all kinds of sweetheart regulation for oil companies (and more recently solar/wind) because we recognize that we need energy to fuel our civilization.

Semiconductors are no different. We need to onshore and stabilize the production of this stuff so we're less vulnerable to China and Russia's BS.

There is a lot of garbage our tax dollars (and the world's bond purchases) buy, but like it or not the United States is at the center of global stability and its in everyone's interest to make sure the things that make life livable in a modern sense are protected.

 

[maxxcool7421]

This is a bs boondoggle

You need cpu grade silicon
You need cpu grade neon

Guess what .. 85+% of all of it comes from china and russia.

Build all foundries you want. you still need CHINA and RUSSIA to supply the raw materials and if they embargo the US these foundries are useless as the remaining 15% of the supply chain CANNOT supply enough of the resources to produce chips for JUST the US.

Google > mining-and-refining-pure-silicon-and-the-incredible-effort-it-takes-to-get-there

Google > silicon production by country statista

Google > low-on-gas-ukraine-invasion-chokes-supply-of-neon-needed-for-chipmaking

If they team up. game over. No US based production of cpu/gpu will occur as domestic production is impossibly short on production and the current production in other countries cannot even supply JUST the US, let alone the entire market needs.

 

[Uncle Al]

The US Govt needs to get OUT of financing private industry unless they are becoming a major stock holder and influence in the private market place AND if they are using tax payer dollars, we the people need to receive shares of stock and dividend payments. There is no free lunch; not for the Govt. and not for private industry sucking on the Govt. tit.

 

[yRaz]

The US Govt needs to get OUT of financing private industry unless they are becoming a major stock holder and influence in the private market place AND if they are using tax payer dollars, we the people need to receive shares of stock and dividend payments. There is no free lunch; not for the Govt. and not for private industry sucking on the Govt. tit.

So I'm not saying it always works like this, but how it's suppose to work is that infustructure investments that increase GDP. These grants then get paid back in the form of tax dollars on the increase of GDP.

Does it always work like that? Certainly not, but we need this in the same way that governments pay for water treatment plants and roads. And, anyway, I picked a trade where I know I'm going to get my peice of the pie. They're currently offering $2200/w and living expenses for your first 6 months to get setup down there with a 5 year contract. I know I'm going once my contract in the northeast is up

 

[GodisanAtheist]

This is a bs boondoggle

You need cpu grade silicon
You need cpu grade neon

Guess what .. 85+% of all of it comes from china and russia.

Build all foundries you want. you still need CHINA and RUSSIA to supply the raw materials and if they embargo the US these foundries are useless as the remaining 15% of the supply chain CANNOT supply enough of the resources to produce chips for JUST the US.

Google > mining-and-refining-pure-silicon-and-the-incredible-effort-it-takes-to-get-there

Google > silicon production by country statista

Google > low-on-gas-ukraine-invasion-chokes-supply-of-neon-needed-for-chipmaking

If they team up. game over. No US based production of cpu/gpu will occur as domestic production is impossibly short on production and the current production in other countries cannot even supply JUST the US, let alone the entire market needs.

-Its one part of what needs to be a more robust shift away from producers like China and Russia. Problem is a country like China can and will artificially deflate prices of strategic goods to make mining in other countries unprofitable to ensure they maintain a chokehold on the supply.

The West needs to be prepared to counter that kind of behavior as a united block.

 

[Superconductor]

Most everyone's broadband infrastructure has come from stuff like this. The current Fiber expansion is directly tied to the Obama terms. But the problem with most this stuff is that there is high degrees of corruption, diverting portions of the money earmarked.

 

[ScottSoapbox]

OpenAI is going to raise $7,000,000,000,000 from investors for chip foundries most likely to profitably run. But by golly we still need the government to redistribute wealth for more foundries so that the companies that support politicians get paid.

 

[Ojref]

The first so-called CHIPS act is seemingly showing out as being mostly fake, and companies like Intel and TSMC have saw through the con. US government says "check is in the mail, get the ball rolling and we'll totally get you paid back" and the money never comes or when it does its spread out and cut down. I would not be surprised if this was the case now. Also, when the construction is complete the business often then faces onerous and increasing regulation from other bureaucrat organizations, complete with ridiculous environmental or DEI initiatives. Its no wonder that the US keeps declining in this sector and other manufacturing disciplines.

 

[Zsoltblabla]

Like food and energy are "strategically vital industries" to the US, we need to start treating tech/semiconductors the same.

We subsidize farmers to ensure there is always a steady supply of food available on the market (although those corn subsidies have resulted in corn syrup in all the things), we pass all kinds of sweetheart regulation for oil companies (and more recently solar/wind) because we recognize that we need energy to fuel our civilization.

Semiconductors are no different. We need to onshore and stabilize the production of this stuff so we're less vulnerable to China and Russia's BS.

There is a lot of garbage our tax dollars (and the world's bond purchases) buy, but like it or not the United States is at the center of global stability and its in everyone's interest to make sure the things that make life livable in a modern sense are protected.

The US is a warmonger that creates destruction and misery all over the world!
Try going abroad and see what everyone thinks of the US…

 

[GodisanAtheist]

The US is a warmonger that creates destruction and misery all over the world!
Try going abroad and see what everyone thinks of the US…

-All the more reason to onshore as much industry as possible, so we don't accidentally destroy the world economy with one of our invasions!

 

[corvard]

Federal subsidies are always a form of corruption. Someone wants taxpayer's money to produce a commercial product? Of course, it's Sam Altman.

 

[Greggs]

The US Govt needs to get OUT of financing private industry unless they are becoming a major stock holder and influence in the private market place AND if they are using tax payer dollars, we the people need to receive shares of stock and dividend payments. There is no free lunch; not for the Govt. and not for private industry sucking on the Govt. tit.

I'd agree with a form of dividends or profit sharing, but otherwise federal government ownership of public companies should generally be avoided. It's proved to be inefficient in many instances and industries.