CHIPS Act funding still waiting for progress as Biden's State of Union Address promises little

Judy Lin, DIGITIMES Asia, Taipei 0

Credit: AFP

US President Joe Biden said in his 2024 State of the Union Address that America is rising and has the lowest trade deficit with China in over a decade. A response from the Semiconductor Industry Association (SIA) urges the US government to make progress on the CHIPS Act soon.

"The Commerce Department has taken important early steps to advance CHIPS manufacturing incentives and research investments, and we look forward to seeing continued headway in the weeks and months ahead," according to the SIA statement.

Meanwhile, Biden said the Inflation Reduction Act has also attracted $650 billion of private sector investments in clean energy and advanced manufacturing to create tens of thousands of jobs in America.

"Thanks to our Bipartisan Infrastructure Law, 46,000 new projects have been announced across your communities – modernizing our roads and bridges, ports and airports, and public transit systems," said Biden.

Biden reiterated the importance of the semiconductor supply chain and emphasized that the US wants to have competition with China, but not conflict.

"We're in a stronger position to win the competition for the 21st Century against China or anyone else for that matter," said Biden. "We're standing up against China's unfair economic practices. And standing up for peace and stability across the Taiwan Strait."

"Companies in the semiconductor ecosystem have announced 80 new manufacturing projects in the US since CHIPS was first introduced in Congress, totaling more than $250 billion in private investments across 22 states. These projects are projected to create 45,000 direct jobs and support hundreds of thousands of additional jobs throughout the US economy.

However, only a few smaller companies have received a relatively small subsidy from the US$39 billion promised for the semiconductor manufacturing sector. GlobalFoundries received US$1.5 billion, while Microchip Technology and BAE Systems got US$162 million and US$35 million, respectively.

US Secretary of Commerce Gina Raimondo has just stated that future projects will be prioritized based on whether they can be operational by 2030, putting America on track to produce 20% of the world's leading-edge logic chips by the end of the decade.

"We anticipate that our investments in leading-edge logic chip manufacturing will put us on track to produce roughly 20% of the world's leading-edge logic chips by 2030, up from the 0% we produce today," said Raimondo.

The Semiconductor Industry Association (SIA) released a statement from SIA President and CEO John Neuffer regarding President Biden’s Address."We commend President Biden and bipartisan leaders in Congress for their longstanding efforts in support of the CHIPS Act and urge the administration to continue implementing CHIPS in an effective and expeditious manner. We also call on leaders in Washington to enact policies that will grow the STEM talent pipeline, promote US technology leadership, and maintain access to global markets."

"These policies will help ensure the CHIPS Act delivers maximum benefits for US semiconductor production and innovation while promoting America's long-term economic and national security."

Biden remarked that the CHIPS Act has attracted private companies investing billions of dollars to build new chip factories here in America to create tens of thousands of high-wage jobs paying more than US$100,000 a year without the requirement of a college degree. That reflects the dire situation of the semiconductor firms trying to manufacture chips in the US – they are facing a shortage of engineering talent. Even with the high wages for high-school graduate workers, semiconductor firms still have problems obtaining a sufficient and qualified workforce on the production line.

But in a fab producing advanced chips, talent is in greater short supply than blue-collar workers. Now companies such as TSMC, Intel, and Samsung are all trying their best to build cooperation programs with nearly universities so that they can send their graduates over or students to their fabs for internships.