U.S. Commerce Department Releases First CHIPS Act Funding Opportunity

The U.S. Department of Commerce released its first CHIPS for America funding opportunity to bolster U.S. semiconductor manufacturing. This first funding opportunity seeks applications for projects involving construction, expansion, or modernization of commercial facilities for the fabrication of leading-edge, current-generation, and mature-node semiconductors. The notice makes clear that eligible projects include both front-end wafer fabrication and back-end assembly, testing, and packaging.

Entities considering funding should submit a statement of interest soon. Pre-applications (optional) and full applications for leading-edge facilities will be accepted on a rolling basis beginning March 31, 2023. Pre-applications (recommended) for current-generation, mature-node, and back-end production facilities will be accepted on a rolling basis beginning May 1, 2023, and full applications for these categories will be accepted on a rolling basis beginning June 26, 2023.

The CHIPS Program Office hosted a webinar on February 28. That webinar, as well as more information about this funding opportunity and other developments, can be accessed at www.chips.gov. Also, be sure to review the Commerce Department’s “Vision for Success” which lays out strategic objectives for U.S. semiconductor innovation and manufacturing.

The IPC Perspective

IPC commends the Commerce Department for its expeditious implementation of the Chips and Science Act. Today’s funding announcement reflects the Department’s commitment to get the funding out to those technology leaders who can help realize the ambitious goals laid out by Congress.

On another positive note, the funding announcement clearly makes eligible projects related to advanced packaging. In fact, it identifies advanced packaging as critical to U.S. semiconductor leadership. This affirmation reflects significant progress on the part of the industry in helping federal policymakers better appreciate the role of advanced packaging in driving semiconductor innovation.

However, the funding announcement refers only broadly to semiconductor “assembly, testing, and packaging.” Is IC substrate fabrication included? It should and we would expect it does, but the fact that the funding announcement does not specifically reference IC substrates is quizzical and unfortunate. It’s likely to contribute to a sense of uncertainty about the U.S. Government’s commitment to address a glaring vulnerability in the U.S. semiconductor supply chain.

We, at IPC, are also concerned about the eligibility of projects related to printed circuit board fabrication and electronic assembly. Earlier this month, U.S. Commerce Secretary Gina Raimondo said in an interview with NPR that “circuit board” companies would have opportunities for CHIPS funding. This funding announcement, however, does not appear to make such project eligible, and it’s not clear that the planned funding announcements later this year do either.  In late spring 2023, the CHIPS Program Office intends to release a funding opportunity focused on the construction, expansion, or modernization of facilities for semiconductor materials and manufacturing equipment. In early fall 2023, the CHIPS Program Office intends to release a funding opportunity for the construction, expansion, or modernization of facilities for research and development.

IPC continues to call the U.S. Government to move beyond a silicon-only mindset and toward a silicon-to-systems innovation strategy. Bolstering chip production without commensurate growth in advanced packaging, PCB fabrication, and electronic assembly is likely to lengthen the supply chain and exacerbate glaring vulnerabilities in U.S. electronics manufacturing capacities and capabilities.