It’s been a busy time on the semiconductor industry front: SEMICON Taiwan; Intel’s Innovation Day; glass interposers making it to center stage; TSMC’s Open Innovation Platform with the announcement of the 3Dblox 2.0; and the first CHIPS Act payout by the Department of Defense (DoD) of $238 million to universities. On top of all the news, IEEE IEDM is only two months away and there is a lot of exciting technology being presented.
There’s finally been some activity on the CHIPS Act front, 14 months after it was signed into law. There have been many applications, but very little money has been distributed until now. Kathleen Hicks, Deputy Secretary of Defense, announced the award that will establish eight Microelectronics Commons regional hubs.
The $238 million is part of a larger $2 billion that will be used for the Microelectronics Commons programs from 2023-2027. Since this is a DoD award, the work must focus on creating microelectronics for military purposes. According to the press release, “The Microelectronics Commons program aims to leverage these Hubs to accelerate domestic hardware prototyping and “lab-to-fab” transition of semiconductor technologies. This will help mitigate supply chain risks and ultimately expedite access to the most cutting-edge microchips for our troops.” However, my previous experience with DOD programs has shown that the technology also will make its way into applications for the public sector. Below is a listing of the hubs that received the awards.
1. Northeast Microelectronics Coalition (NEMC) Hub
Awardee (Hub Lead): The Massachusetts Technology Collaborative (MassTech)
Hub Lead State: Massachusetts
FY23 Award: $19.7 M
90 Hub Members
2. Silicon Crossroads Microelectronics Commons (SCMC) Hub
Awardee: The Applied Research Institute (ARI)
Hub Lead State: Indiana
FY23 Award: $32.9 M
130 Hub Members
3. California Defense Ready Electronics and Microdevices Superhub (California DREAMS) Hub
Awardee: The University of Southern California (USC)
Hub Lead State: California
FY23 Award: $26.9 M
16 Hub members
4. Commercial Leap Ahead for Wide Bandgap Semiconductors (CLAWS) Hub
Awardee: North Carolina State University (NCSU)
Hub Lead State: North Carolina
FY23 Award: $39.4 M
7 Hub members
5. Southwest Advanced Prototyping (SWAP) Hub
Awardee: Arizona Board of Regents on behalf of Arizona State University
Hub Lead State: Arizona
FY23 Award: $39.8 M
27 Hub members
6. Midwest Microelectronics Consortium (MMEC) Hub
Awardee: MMEC
Hub Lead State: Ohio
FY23 Award: $24.3 M
65 Hub members
7. Northeast Regional Defense Technology Hub (NORDTECH)
Awardee: The Research Foundation for the State University of New York (SUNY)
Hub Lead State: New York
FY23 Award: $40.0 M
51 Hub members
8. California-Pacific-Northwest AI Hardware Hub (Northwest-AI Hub)
Awardee: The Board of Trustees of the Leland Stanford Junior University
Hub Lead State: California
FY23 Award: $15.3 M
44 Hub members
One of the hubs’ notable elements is the number of participants in each project. The smallest has seven members and the largest has 90. This means the funding will hopefully see a wide distribution, along with significant collaboration on innovative projects. It will be interesting to see if these are the only hubs supported over the next five years, or if other hubs are awarded as the funding continues. With $238 million being distributed to date, that is only slightly more than 10% of the available funding.
While the first CHIPS funding is being released to universities or the MEC hubs, a new grant is focused on smaller projects with ~$300 million or less in capital investment. Plans will be accepted between December 1, 2023, and February 1, 2024. The total funding for projects is $500 million, and grants will be made for 10% of the project; although there is a caveat, that if a company can make a compelling enough argument, it is possible that up to 30% of the project will be funded.
Luckily for SEMI members, SEMI is on top of this grant and working to assist members in understanding the notice of funding opportunity. This will hopefully give a boost to sub-suppliers of the semiconductor industry or smaller fabs looking to expand capabilities.
Meanwhile, the big projects that were announced either before the CHIPS Act was signed into law or shortly after are still waiting for the funding to be released. According to the Semiconductor Industry Association (SIA), roughly $200 billion in private investment was announced for projects on US soil. Most of those are looking for some sort of funding through the CHIPS Act. One of the big questions is when will the money start to flow.
It’s no secret that Intel, Micron, TSMC, and Samsung are waiting on CHIPS funding to facilitate the building of their proposed facilities. But so are Skywater, Wolfspeed, Integra, EMP Shield, TI, and others. The State of Kansas, in its incentives to EMP Sheild and Integra, was expecting CHIPS Act funding in October 2023.
The CHIPS Program Office (CPO) has been tasked with the distribution of funds. According to a Wall Street Journal article on August 15, the Department of Commerce (DoC) went to Wall Street to assemble the team that will be responsible for the distribution of funds. According to Secretary of Commerce Gina Raimondo. “We’re pushing the team to go fast, but even more important, to get it right”. The DoC hired over 140 staffers to pour through the 460 applications they have received to date. With different programs extending grants over the next five years, this team will be very experienced at looking through applications by the time they finish. Time will only tell if Congress will reenact the CHIPS Act when this current funding runs out.
Todd Fisher, formerly an executive at the private equity firm KKR, is leading the team of investment bankers, private equity investors, and management consultants who will decide how to distribute the first round of funding. With the amount of private investment hinging on some of the CHIPS Act grant evaluations, these will not be easy decisions to make. As one member of the team put it, “In the private financing world, no one gets to see the deals you don’t make, in this situation they do, and there will be a lot of noes!” I can only imagine this team having to answer to Senator Chuck Schumer when a project he has an interest in gets a “no”.
According to Secretary Raimondo, CHIPS funding should start rolling out before the end of the year. I’m sure there are many applicants who are anxiously awaiting to see where the dollars roll out. I’m interested in seeing where they land as well.
