IFTLE thought it might be of value to take a look at the Semiconductor Industry Association’s (SIA) response to the Dept of Commerce’s request for information (RFI) on “Incentives, Infrastructure, and Research and Development Needs to Support a Strong Domestic Semiconductor Industry”, which is being used to plan for and design programs under the CHIPS for America Act.
The Commerce Department RFI requested direction on semiconductor manufacturing incentives, the proposed expansion of the lab-to-fab pipeline with the establishment of a National Semiconductor Technology Center and National Advanced Packaging Manufacturing Program, and how the government can address industry workforce needs.
For those of you who are not aware, the Semiconductor Industry Association (SIA) is a 501 C6 nonprofit that was started in 1977 to “..advance policies that help the industry grow and unite semiconductor companies around common challenges”.
In the past, the SIA formed an affiliated, non-profit corporation, the Semiconductor Research Corporation (SRC), to fund university research in the United States and thereby support university faculty and students. In the 1980s in order to address manufacturing competition from the Japanese semiconductor industry and lagging technology development in U.S., the SIA launched SEMATECH, an industry/government consortium to conduct research at its own facility in Texas. Industry and DARPA jointly managed and funded SEMATECH through equal contributions.
In this response, the SIA urges that the Commerce Dept. be guided by the following principles in implementing manufacturing incentives and research initiatives under CHIPS.
- Programs should be implemented in a streamlined, flexible, competitive, and equitable manner with limited bureaucracy and administrative burden. (Although IFTLE agrees fully with this statement, it appears that SIA has forgotten that they are talking to the Government that is the very embodiment of the meaning of “bureaucracy and administrative burden”).
- CHIPS Act grants should be prioritized to catalyze investments that will have the greatest impact on renewing U.S. innovation, increasing U.S. technology leadership, and stabilizing U.S. supply chains
“ The U.S. simply cannot afford to fall behind, or worse yet, permanently exit the race for semiconductor innovation leadership. At the same time, incentives for manufacturing should be provided to fill in the gaps and vulnerabilities throughout the entire semiconductor ecosystem and to expand semiconductor development and manufacturing in the United States across the full range of technologies, including analog, memory, and logic at the leading-edge, mainstream, and legacy nodes, and include advanced packaging/testing and key areas in semiconductor manufacturing equipment and materials.”
- SIA supports the CHIPS provision that prevents Commerce from providing financial assistance unless the project “is in the interests of the United States” and the applicant for that project is responsive to “national security needs”.
- Funding provided under the CHIPS Act should be provided to projects that are commercially viable and sustainable over the long term. CHIPS Act funding should only be provided if the facilities can be constructed and begin manufacturing in an expeditious manner.
- the Commerce Department should state that projects that are shovel-ready or currently underway that meet the goals of the CHIPS Act should be eligible for funding.
- The U.S. needs to target its investments to, at a minimum, meet the basic domestic demand for semiconductor chips used in national security systems, advanced defense aerospace, and critical infrastructures, such as data centers and communications networks.
- Advanced Logic: These chips are essential for national security and supply chain resilience. There is a crisis of advanced logic in the U.S. with no domestic facilities able to operate at the leading edge. Key technologies of the future, such as AI, 5G, cloud computing, and autonomous driving, rely on these advanced semiconductors, which account for 34% of total U.S. semiconductor demand.
- Mainstream Logic: Chips, such as microcontrollers, image sensors, and connectivity chips, are necessary for critical applications like automotive manufacturing, aerospace, robotics, and other industrial goods.
- Advanced DRAM Memory: High-end DRAM demand for national security and critical infrastructure is driven by applications in AI, datacenters, and supercomputing.
- Analog: This category, which includes power electronics, radiofrequency, and imaging and sensor semiconductors, is essential for current and future critical applications, such as electric vehicles, data center power management, 5G communications, and military radar. Given the importance of these analog technologies for defense, aerospace, and national technology leadership, and the diversity of technologies in the analog space, we project that as global production capacity for analog rises, it is critical that the U.S. maintain a minimum of 20% of the global analog capacity in order to establish a viability baseline for these key sectors
In extending eligibility for financial assistance to equipment and materials companies, Commerce should focus on key gaps and vulnerabilities in the ecosystem including:
- Substrates and substrate materials
- Photoresists, coating and developing equipment
- Lithography equipment
- Process chemicals
- Industrial gasses
- Sputtering targets
- SIA suggests using the National Science & Technology Council (NSTC) to increase access to advanced facilities and equipment, so the costs of prototyping and piloting need not be borne by players that could otherwise not afford it. Additionally, by creating hubs of semiconductor research, it also provides participating companies with access to the industry’s leading experts.
- In order to attract and retain semiconductor talent, they suggest the govt to end per country green card caps and exempt STEM degreed graduates of US Universities from these existing green card caps.
- SIA specifically calls for the NSTC to build and strengthen the U.S. R&D ecosystem’s capabilities in emerging areas like advanced packaging, heterogeneous integration, and masking infrastructure.
- As the NSTC upgrades institutions’ capabilities it must ensure that access to prototyping facilities, advanced simulation software, tools, and personnel remain accessible to researchers and startups. The NSTC must strike a balance between spreading funding evenly and not concentrating investments in a single technology or location.
- Some NSTC facilities must specialize in centers of excellence that focus in critical strategic technologies.
- NSTC must provide access to tools for both large and small companies.
- Accessing wafer starts can be an expensive and difficult task in the transition from laboratory technology to prototyping and very early piloting, so the NSTC could coordinate access for researchers at public institutions as well as large and small companies by purchasing wafer starts for multi-project wafer runs at fabs.
In addition, the SIA pointed out that “the U.S. also has a significant shortage of capability in packaging”. “Innovations in how semiconductors are packaged have enabled the global semiconductor industry to achieve additional advancements on top of those traditionally gained during the “front-end” manufacturing process. Many packaging technologies exist today and selecting the correct one is no longer an afterthought but an integral part of semiconductor manufacturing. Unfortunately, the U.S. holds only a 9.48% share in the global advanced packaging market at $3.2 billion in 2021; meanwhile, China is forecast to reach $14.3 billion by 2026.”
The suggestion is for an Advanced Packaging Manufacturing Program. The SIA goes into a 7-page discussion of what and why things are needed, but it is at a 50,000 ft level with absolutely nothing in terms of content that you have not seen here a thousand times. The main point is the lack of advanced packaging and assembly manufacturing and prototyping in the US.
The attributes that they then describe being needed are those of an institute. IFTLE has been saying for years that the US lacks the equivalent of IMEC or Fraunhofer or Leti or ITRI or A Star. In fact in my Dow days (now 15 years ago) that is where I had to go to get materials work done, i.e offshore, since there was not a similar site in the US. For a while MCNC – the Microelectronics Center of NC – served that purpose but ultimately political issues led to its demise.
In summary, this SIA document reads a like lot the MIT University response paper (see IFTLE 515), in fact, some might say there has been collusion amongst the parties since the responses are so much alike. I prefer to think that’s because some things simply make sense to all of us working in the industry.
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