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$12 Billion Legislation Package Seeks to Revive U.S. Semiconductor Industry

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Sens. Mark R. Warner, D-Va., and John Cornyn, R-Texas, recently introduced legislation they said would restore the U.S. semiconductor industry. The “Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act” includes a $12 billion spending package and tax incentives designed to promote technology innovation across the chip ecosystem.

The CHIPS Act proposes to revive domestic chip making, fund research and development and secure integrated circuit (IC) supply chains. Spending includes $5 billion to launch a manufacturing institute within the Commerce Department focused on chip packaging technology. That includes a $500 million investment fund to support a “domestic advanced microelectronics packaging ecosystem.”

The act proposes to create new research and development streams “to ensure U.S. leadership in semiconductor technology and innovation critical to American economic growth and national security” by:

  • Allocating $2 billion to implement the Electronics Resurgence Initiative of the Defense Advanced Research Projects Agency.
  • Spending $3 billion to implement semiconductor basic research programs at the National Science Foundation.
  • $2 billion to implement semiconductor basic research programs at the Department of Energy.
  • $5 billion to establish an Advanced Packaging National Manufacturing Institute under the Department of Commerce to establish U.S. leadership in advanced microelectronic packaging.

“Semiconductors underpin nearly all innovation today and are critical to U.S. communications and defense computing capabilities,” Cornyn said. “While Texas has been a leader in manufacturing this technology and the U.S. leads the world in chip design, most of those chips are manufactured outside the United States.

“This legislation would help stimulate advanced semiconductor manufacturing capabilities domestically, secure the supply chain, and ensure U.S. maintains our lead in design while creating jobs, lowering our reliance on other countries for advanced chip fabrication, and strengthening national security,” he added.

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