semiconductors

The semiconductor industry's workforce is expected to grow from approximately 345,000 jobs today to about 460,000 by the decade's end, and of these new jobs, roughly 67,000 are at risk of being unfilled, according to a report from the Semiconductor Industry Association and Oxford Economics (SIA-OE report).

The Biden Administration issued an executive order earlier this week that provides guidance on the safe, secure, and trustworthy development and use of Artificial Intelligence (AI) in the U.S. The EO includes guidance for agencies to work to provide new opportunities for small businesses and entrepreneurs in AI and other directives.

The CHIPS and Science Act (Act) established guardrails to prevent funding recipients from using the money to support the development of semiconductor manufacturing and technology in foreign countries of concern, including North Korea, China, Russia, and Iran. On September 25, 2023, the CHIPS Program Office CPO published the final rules for preventing improper use of CHIPS Act funding. The guardrails in the legislation include the Expansion Clawback and the Technology Clawback. The Expansion Clawback restricts recipients from using CHIPS funding for material expansion of manufacturing capacity in a foreign country of concern; the Technology Clawback limits recipients from engaging in joint research or technology licensing with a foreign entity of concern.

An independent selection committee recently announced the incoming board of trustees that are expected to oversee a nonprofit entity that will operate the National Semiconductor Technology Center (NSTC). The NSTC is the core research and development (R&D) component of the Department of Commerce’s CHIPS for America program. The NSTC will be a collaboration hub for members of the entire semiconductor manufacturing and supplier ecosystem. It will accelerate innovation and help lower the cost and time required to bring new technologies to market. 

The Department of Defense announced yesterday that it issued $238 million from "Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act" funding for the establishment of eight Microelectronics Commons (Commons) regional innovation hubs. With $2 billion in funding for Fiscal Years 2023 through 2027, the Microelectronics Commons program aims to leverage these hubs to accelerate domestic hardware prototyping and "lab-to-fab" transition of semiconductor technologies. The hope is this will help mitigate supply chain risks and ultimately expedite access to the most cutting-edge microchips for U.S. troops.

The National Science Foundation (NSF) is expanding a network of research centers across the country to translate university-based R&D into new, and hopefully, better advanced materials. In late June, NSF announced the distribution of $162 million to support the creation of nine more Materials Research Science & Engineering Centers (MRSECs), bringing the total number of centers to twenty. Each of the new centers will receive $18 million over six years.

The U.S. Department of Commerce recently announced a funding opportunity and application process for large semiconductor supply chain projects that include materials and manufacturing equipment facility projects with capital investments equal to or exceeding $300 million. Alongside the funding opportunity for larger supply chain projects, the Department also released a “Vision for Success" outlining strategic objectives for investments in the semiconductor supply chain. The goals in the vision paper include:

The U.S. Department of the Treasury released new proposed regulations this week that, together with draft guidance published in March, define how semiconductor companies can take advantage of the advanced manufacturing investment tax credit created as part of the CHIPS & Science Act. This credit is equal to 25% of the capitalized costs of tangible property used to manufacture semiconductors or semiconductor manufacturing equipment placed in service after 2022, and the credit is refundable, meaning that companies posting a loss can still receive its full value. In evaluating the cost of the legislation, the Congressional Budget Office expected more than $24 billion in claims for the credit. The latest proposed guidance defines elective payment procedures, which are intended to help companies receive the credit’s financial benefits more quickly. Comments on the rule are due by August 14.

Just before the 2023 Memorial Day weekend, the Texas Senate passed and sent the Texas CHIPS Act bill to the governor’s desk. The legislation creates the Texas Semiconductor Innovation Consortium in a bid to protect the state’s competitive standing for future federal funding and authorizes the Texas Semiconductor Innovation Fund. The recently passed Texas budget appropriates $1.3 million for the Consortium, but it does not appear that there is a dedicated appropriation in the budget bill for the Fund.

The vision and strategy for a National Semiconductor Technology Center (NSTC), a key part of the R&D program set out in the CHIPS and Science Act, was released this week by the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST). The paper, A Vision and Strategy for the National Semiconductor Technology Center, describes the center’s mission, core programs, and other features. While the paper refers to it as a center, it is expected to consist of a headquarters facility and an integrated network of NSTC-affiliated technical centers with locations geographically distributed to leverage existing capabilities. It will also start an investment fund that enables future innovations in early-stage companies and will create programs that strengthen and expand the semiconductor workforce.