The CHIPS Act of 2022 promised a $52 billion investment in the U.S. semiconductor industry. But while the groundbreaking legislation is a precursor to big advancements in the industry, these will take time to manifest.
The process moved a step further recently when the U.S. Commerce Department released a white paper detailing its plans for the National Semiconductor Technology Center (NSTC). Notably, the latter’s purpose, to advance the research and development of chips in the United States, comes at a time when competition is heating up around the globe to develop and produce more advanced silicon.
The NSTC is a cornerstone feature of the CHIPS Act, designed to jumpstart American innovation in the semiconductor space. As such, taking a step toward its long-awaited implementation is exciting news.
John Neuffer, President and CEO of the Semiconductor Industry Association (SIA), said in a statement following the announcement, “Today’s action represents a valuable step forward.”
He adds, “While we are still reviewing the details set forth in the Commerce Department’s white paper, we are encouraged it reflects industry leaders’ input and recommendations.”
Neuffer, in part, refers to a recent report from SIA detailing the current state of semiconductor research. The Commerce Department’s report also references “extensive feedback” from stakeholders and industry leaders.
In the statement, Under Secretary of Commerce for Standards and Technology and NIST Director Laurie E. Locasio says, “This center will give the U.S. semiconductor industry an enduring technological lead and help develop a skilled workforce capable of manufacturing the world’s most advanced devices.”
Since the original announcement of the CHIPS Act, companies across America have aggressively pursued new projects and initiatives. Apart from the $52 billion in directed spending outlined by the legislation, analysts predict hundreds of billions of additional dollars will be poured into the industry from private equity sources. This is projected to create hundreds of thousands of new jobs in the country.
Although perhaps more importantly, industry leaders view the CHIPS Act as a way for American chipmakers to pull level on the global stage. Currently, the U.S. makes just 12% of the world’s semiconductors, a paltry share compared to the size and strength of the country’s overall economy. That share has also fallen significantly since the 1990s when the U.S. was responsible for 37% of global chip manufacturing.
Despite America’s lack of chip production, countless U.S. companies rely on semiconductors to continue their operations. The COVID-19 pandemic put this issue into the spotlight, demonstrating America’s vulnerability to supply chain disruptions that impact semiconductor production.
With the chip industry poised to top $1 trillion by 2030, lawmakers hope the CHIPS Act will help the U.S. regain its status as a major player. Whether or not this lofty goal is reached remains to be seen.
However, the latest steps toward implementing the NSTC go a long way. The program aims to “accelerate America’s ability to develop the chips and technologies of the future to safeguard America’s global innovation leadership.”
The latest Commerce Department whitepaper outlines the various strategies, visions, and core programs intended for the NSTC. Providing funding and initiatives for new production facilities in the U.S. is a key objective. The white paper also outlines a plan to work with both academic and industry partners to create and advance new research programs.
As the world continues to rely heavily on semiconductors in nearly every facet of daily life, the importance of this industry will only grow in the coming years. While global cooperation and partnerships also remain crucial, getting the U.S. back up to speed is a net positive for the industry. The latest developments related to the CHIPS Act and NSTC bring this one step closer to reality.