Biden administration unveils plan for bolstering semiconductor production

The Biden administration on Monday unveiled its plan for bolstering domestic chip production in the U.S. by using the $50 billion in funding from the CHIPS and Science Act passed this summer. 

The administration will use the majority of the funding, around $28 billion, to establish domestic production of leading edge logic and memory chips through grants, subsidized loans or loan guarantees, the Department of Commerce said in an announcement. 

The administration will use around $10 billion to increase production of current-generation semiconductors and chips. 

An additional $11 billion will be invested in research and development in an effort aimed at creating a “dynamic new network of innovation” for the semiconductor industry in the country, the department said. 

The administration’s strategy also provides recommendations for applicants to receive funding, calling for them to aim to increase scale and track private capital, leverage collaborations to build the semiconductor ecosystem, support regional and local industry clusters, establish a secure semiconductor supply chain, and expand the workforce pipeline to match the domestic capacity needs. 

Funding documents that will provide specific application guidance for the program will be released in early February, the department said. Loans and awards will be made on a rolling basis as soon as applications can be processed. 

President Biden signed the CHIPS and Science Act in August, after it passed in the House and Senate in July. 

Proponents of the bill said it will help the U.S. compete with China.

Commerce Secretary Gina Raimondo urged states to compete for the funding during an event last week.

“This is a race,” she said, according to Bloomberg. “It’ll be competitive. It’ll be transparent, and I hope every state competes.”