US to invest $5B in chip R&D through new public-private consortium

The Biden administration on Friday announced more than $5 billion in CHIPS Act funds will go to chip-related research, including workforce needs, with nearly all the funding going to the new National Semiconductor Technology Center.

The investment is meant to advance US leadership in semiconductor R&D, cut down on the time and cost of commercialization of new technologies, bolster national security and connect and support workers in securing semiconductor jobs, the White House said in a statement Friday.

The investment funnels at least $5 billion to the NSTC, a public-private consortium of the secretaries of Commerce, Defense, and Energy and the director of the Natioal Science Foundation and Natcast CEO Deirdre Hanford. (Natcast is the National Center for the Advancement of Semiconductor Technology, a non-profit created to operate the NSTC.)  “We need to be building for the future and that means making investments in R&D,” Commerce Secretary Gina Raimondo told reporters prior to the official announcement.

Also, hundreds of millions of dollars are designated for NSTC workforce efforts with the creation of a Workforce Center of Excellence. Workforce needs are expected to mushroom as R&D expands and chip facilities come online in future years. Currently, the US Labor Department tracks about 375,000 people employed in production of computer chips with an average income of more than $82,000.

Also Friday, the Commerce Department released a notice of intent to invest $200 million in a CHIPS manufacturing USA Institute, a digital twin institute where innovators can replicate and experiments with manufacturing processes at low cost.

Another notice of intent was issued to to fund up to $300 million in R&D for advanced packaging R&D.  Commerce has also already awarded $100 million in funding across 29 projects in the CHIPS Metrology program for development of new measurement methods, models and instruments.

Commerce and the Biden administration have been criticized in recent days for delays in doling out grants for chip manufacturing provided under the $53 billion CHIPS Act, signed into law by Biden in August 2022.  The act includes $11 billion for R&D and workforce development with $39 billion for grants.

Patrick Moorhead, founder and chief analyst at Moor Insights & Strategy, said several large chipmakers, including Intel, that want to build fabs in the US have slowed down timelines for new chip production or construction over concerns with funding and CHIPS Act delays.  He said the companies have such concerns but cannot express their concerns out loud.

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