The U.S. Commerce Department has reported that an impressive number of more than 460 companies have shown keen interest in securing government semiconductor subsidy funding. This initiative aims to bolster the nation’s competitiveness in the realm of science and technology, particularly in response to China’s growing efforts in the semiconductor sector.
In a recent statement, President Joe Biden highlighted the significant progress achieved within the past year, with companies collectively committing a staggering $166 billion worth of investment to fund semiconductors and electronics manufacturing. The president expressed confidence that this legislation would reinstate America’s leadership position in semiconductor manufacturing, thereby reducing reliance on foreign countries for critical components and advancing clean energy supply chains.
The Commerce Department initiated the acceptance of applications in June for the $39-billion subsidy program, encompassing support for U.S. semiconductor manufacturing, equipment procurement, and materials necessary for chip production. While the department has not yet announced the recipients of the awards, it has emphasized the importance of ensuring meticulous evaluation and proper execution.
Commerce Secretary Gina Raimondo stressed the significance of these investments, noting their long-overdue role in safeguarding both economic and national security. “We need to move quickly, but it’s more important that we get it right,” Gina Raimondo asserted during a press briefing.
According to Handshake, student applications to full-time jobs posted by semiconductor companies were up 79 percent in 2022-2023, compared to just 19 percent for other industries.
A senior Commerce Department official confirmed ongoing dialogues with applicants and hinted at forthcoming major progress announcements in the coming months, underscoring the government’s commitment to expediting the initiative, Reuters news report said.
Integral to the legislation is a 25 percent investment tax credit aimed at incentivizing the construction of semiconductor manufacturing facilities. This credit, estimated to be valued at $24 billion, has garnered support from industry leaders like Intel CEO Pat Gelsinger, who lauded the swift actions of governments worldwide to revitalize the semiconductor manufacturing landscape.
Over the past year, the Commerce Department diligently assembled a team of more than 140 experts and devised comprehensive regulations for application assessment. Moreover, in a bid to prevent undue benefit to China, the department is requiring award-seeking companies to provide access to affordable, high-quality childcare services and share any excess profits.
The department’s approach to funding awards involves careful diligence, as Raimondo highlighted in February, stating, “We’re not writing blank checks to any company that asks.”
As the Commerce Department proceeds to select deserving projects, it faces the task of determining the allocation of government funds, including the combination of grants, government loans, and loan guarantees. A pivotal component of the legislation dedicates $11 billion to advanced semiconductor manufacturing research and development, with the National Semiconductor Technology Center poised to be the focal point of these efforts.
Collaborations between the Departments of Commerce, Defense, Energy, and the National Science Foundation are already underway to establish this center, aiming to facilitate seamless integration of research, development, and workforce initiatives across the semiconductor ecosystem. While no specific location has been designated as of yet, this ambitious endeavor marks a significant step toward solidifying America’s technological leadership in the semiconductor industry.