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The rollout of the Biden administration’s CHIPS Act award money has focused on providing major awards for major companies, with just four leading-edge semiconductor manufacturers receiving the majority of the $33 billion allocated so far. With $6 billion remaining, the focus is shifting to sending smaller awards to smaller companies throughout the supply chain. The goal is to attract private investment while enhancing supply chain resilience and economic security by funding U.S.-based facilities in materials and packaging. Investments will be directed to upstream suppliers and downstream players involved in advanced packaging.

The remaining CHIPS Act award money will be allocated by the end of the calendar year, with hundreds of companies still vying for a portion of the funds that are available. Companies like Intel, Taiwan Semiconductor, Samsung, and Micron have received the lion’s share of the grants, while GlobalFoundries and a few smaller companies received smaller awards. The Commerce Department aims to build out the U.S. chip supply chain from end to end by 2030, requiring a balance of awards to upstream and downstream players in the supply chain. There has been a significant investment in the production of wafers so far.

The Commerce Department is focusing on getting funding to all players in the supply chain, expecting significant investment throughout. The awards announced have led private companies to pledge over $300 billion in leading-edge production, which will benefit smaller suppliers as well. In addition to providing funding to larger companies, Commerce has set aside $500 million specifically for companies with projects totaling $300 million or less in capital investment. The goal is to advance economic and national security interests through the development of the overall supply chain.

To ensure the security and resilience of the U.S. chip supply chain, it is crucial to fund smaller companies that play support roles. One such company in talks with Commerce for a CHIPS award is IQE, a U.K.-based company that produces compound semiconductor wafers for major companies like Apple. IQE’s chief executive emphasized the importance of continuously looking at the supply chain as a whole, particularly in an environment where geopolitics are challenging to navigate. While there is a focus on AI and high-performance chips, compound semiconductors play a crucial role as well.

With the remaining grant money becoming scarce, forthcoming awards will be smaller than the multi-billion-dollar packages that have been distributed so far. However, even a modest award could have a significant impact on small companies in the supply chain. It is important to continue investing in upstream projects to ensure the industry’s advancement and national security interests. The Commerce Department is committed to providing funding across the industry, aiming to build out a resilient and secure U.S. chip supply chain.

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