As part of a plan to bring more semiconductor chip manufacturing to the U.S., Commerce Secretary Gina Raimondo announced that the CHIPS Act will create two “clusters” of semiconductor manufacturers.
- The CHIPS Act, which includes $52 billion in funding, is intended to draw more chip manufacturers to the U.S.
- The proposed clusters would be groupings of businesses for each phase of the chip manufacturing process. Fabrication plants, research and development, packaging, and assembling would work together.
- “Our vision at the end of this initiative is to make it so that the United States of America is the only country in the world where every company capable of producing leading-edge chips will have a significant R&D and high-volume manufacturing presence in our country,” Raimondo says.
- Next week, applications for companies that plan to participate will be available.
Why it’s news
Supply-chain disruptions during the pandemic led to chip shortages across various industries worldwide. Since then, the Biden administration has been working to bring more manufacturing to the U.S. and secure the supply chain.
Funding from the CHIPS Act will promote both newly developed chip manufacturing and support older but more common models of chips. These older models were in the shortest supply during the pandemic, Axios reports.
Exactly where these clusters will be hasn’t been announced yet, but Arizona, Ohio, and Texas are likely candidates. Already these states have significant investments from top manufacturers like Intel, Samsung Electronics, and Taiwan Semiconductor Manufacturing (TSMC).
Backing up a bit
In part, the decision to invest further is driven by TSMC’s plans to produce chips for Apple in the U.S. TSMC is the primary producer of chips for all Apple products. As Apple has been looking to diversify its supply chain, the tech company has made moves to find production outside of China and the surrounding areas.
Even before Raimondo announced the new clusters, the CHIPS Act had already attracted investors to the U.S. Nearly 40 projects totaling $200 billion have been announced, The Wall Street Journal reports.