The United States has also started making five-year plans.
The U.S. government announced a five-year strategy to support the American semiconductor industry with funds from the “Chips Act.” This 61-page paper outlines four key and broad goals that the U.S. National Science and Technology Council hopes to achieve within five years: rapidly and successfully research future microelectronics technologies, transform research into manufacturable products, develop and educate the semiconductor workforce, and establish connections between different industry participants in the private and public sectors.
This strategic document, named “National Microelectronics Research Strategy,” was authored by the Subcommittee on Microelectronics Leadership of the National Science and Technology Council (NSTC), which is part of the White House. The NSTC helps promote the science-related goals of the federal government and the president. Given that the Chips Act and the national competitiveness of the semiconductor industry have been top priorities for the Biden administration, it is not surprising that the NSTC published a document about its desired goals.
A five-year strategy might remind people of the five-year plans of China and the former Soviet Union. However, unlike those plans, which were focused on the economy, the NSTC’s paper does not provide hard numbers that the industry needs to achieve but rather focuses on broader themes beyond just the economy. The NSTC describes its paper as a “framework for federal departments and agencies, academia, industry, nonprofit organizations, and international allies and partners,” which will help “shape the semiconductor field” for the benefit of the United States and its friendly nations.
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Four Main Goals for the Next Five Years
The U.S. government aims to achieve four main goals in the next five years: “to realize and accelerate research progress in the next generations of microelectronics technology”; “to support, construct, and bridge the microelectronics infrastructure from research to manufacturing”; “to develop and sustain a skilled workforce for the microelectronics R&D to manufacturing ecosystem”; and “to create a vibrant microelectronics innovation ecosystem to accelerate the transition of R&D to the U.S. industry.”
This lengthy and complex paper essentially explains how funds from the CHIPS Act should be utilized to enhance R&D, manufacturing, and education. The first goal focuses on R&D in semiconductor materials, tools, and packaging, and on “turning innovation into manufacturable processes.” Correspondingly, the second goal aims to address the “gap from the lab to the fab,” particularly prioritizing resources for small businesses and academia to access manufacturing and testing of chips.
The third goal centers on education and the semiconductor industry workforce, aiming to expose educators and students to all the different disciplines related to the field, including at the K-12 level. The NSTC also recommends strengthening undergraduate and graduate courses, noting that current “coursework is insufficient.”
The paper suggests engaging with the broader public to increase awareness and curiosity about silicon, proposing museum exhibits and competitions to spark public interest. This effort mirrors NASA, as many Americans learn about planets, astronauts, and other space-related topics from a young age.
The fourth and final goal focuses on the semiconductor ecosystem and fostering collaboration among its various teams. The NSTC envisions deeper collaboration among various entities in both the public and private sectors, including government agencies, academic institutions, and companies. The paper also pays special attention to assisting startups, which need significant funding to begin operations but may not be profitable for some time.
It’s clear that the industry is far from achieving the goals outlined in the paper. Currently, the focus of the CHIPS Act is mostly on providing funds to major companies like Intel and TSMC to ensure their U.S. fabs are completed on time. This is likely why the paper assumes it will take five years to achieve all these goals, which may be more challenging and crucial than building fabs.
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Supplemental Subsidies, the U.S. Launches a Global Semiconductor “Arms Race”
Intel hosted its first foundry event in San Jose, California. At the event, U.S. Commerce Secretary Gina Raimondo stated that if the U.S. wants to “lead the world” in semiconductors, it must increase government subsidy investments.
To encourage the “reshoring” of chip manufacturing, the Biden administration introduced the CHIPS Act in August 2022, promising $52.7 billion in government subsidies over five years for U.S. semiconductor research and production, with $39 billion allocated for semiconductor manufacturing. To date, although over 170 global chip companies have applied for these subsidies, the U.S. Commerce Department has only awarded three smaller grants. The $1.5 billion granted to GlobalFoundries, the third-largest contract chip manufacturer, is the largest allocation so far.
GlobalFoundries’ chips are widely used in satellite and space communications, the defense industry, and automotive blind spot detection and collision warning systems, as well as Wi-Fi and cellular connectivity. The U.S. government’s $1.5 billion incentive subsidy will support GlobalFoundries’ construction and expansion in New York and Vermont. Raimondo emphasized that the chips produced in these new factories are “crucial to U.S. national security.”
Intel, a U.S. chip giant, is also seeking funding from the CHIPS Act, with the Biden administration currently negotiating to provide over $10 billion in subsidies to the company. This could be the largest financial award in the government’s plan to “reshore” semiconductor manufacturing, potentially including loans and direct grants.
Intel previously announced plans to invest billions in a new factory in Ohio, which could become one of the world’s largest chip factories. In early February, Intel revealed plans to delay the factory’s completion until 2026, with speculation that the delay in government subsidies might be one reason for the slow progress. However, Intel’s CEO Pat Gelsinger stated on February 21 that the subsidy announcement would come “very soon.” Commerce Secretary Raimondo also said on the same day that Intel plays a “very important role in this (semiconductor industry) revival” and should be prepared for the upcoming CHIPS Act funding announcement.
Raimondo also mentioned that the CHIPS Act alone is not enough to regain U.S. leadership in the semiconductor supply chain. She added, “If we want to lead the world, we must have some kind of sustained investment—whether you call it CHIPS Two or whatever. We’ve fallen too far behind.”
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