With the midterm elections on the horizon, the Biden administration is under pressure to show that it can use this money wisely and bring manufacturing investment back to the United States. The Department of Commerce is responsible for selecting companies to receive funds and monitoring investments.
In its strategy document, the Commerce Department said that while the United States remains the world leader in chip design, it has lost the leading edge in producing the world’s most advanced semiconductors. The paper said it was a large part of the industry.
The high cost of building the complex facilities that manufacture semiconductors, called fabs, has forced companies to separate the facilities that design and manufacture chips. Many large companies such as Qualcomm, Nvidia, and Apple design their chips in the United States, but outsource manufacturing to foundries based in Asia, particularly Taiwan. The system creates a risky source of dependency for the chip industry, the White House said.
The funding will help offset the higher costs of building and operating facilities in the U.S. compared to other countries, and the larger types of companies now more common in Asia, the ministry said. It aims to encourage the construction of fabs in the United States. Domestic and foreign companies can apply for the fund, as long as they invest in projects in the United States.
To receive funding, companies must assess the long-term economic viability of the project and its “ripple effect” to the communities in which it operates, such as investments in infrastructure and workforce development, or the ability to attract suppliers. must indicate. Customer, department said.
Priority will be given to projects involving economically disadvantaged individuals and businesses owned by minorities, veterans, women, or based in rural areas, the ministry said. So do projects that help make the supply chain safer, for example, by providing a separate production location for advanced chips made in Taiwan. Businesses are encouraged to demonstrate that other sources of funding are available, including private capital, state and local investment.