CHIPS Act Funds Flow, Await Results


Nearly two years after President Biden signed the $52.7 billion CHIPS Act to bolster US semiconductor manufacturing, funds are beginning to reach leading chipmakers. The $39 billion allocated for manufacturing incentives is now being distributed, with Samsung set to receive $6.4 billion to expand chip production capacity.

While these investments aim to enhance semiconductor capabilities, it will take years before their impact is felt. The construction of chip fabrication facilities alone can take up to two years, followed by equipment installation and qualification, a process lasting six to nine months. Additionally, the production of semiconductor batches can take two to three months, while more advanced chips may require up to four months.

The CHIPS Act targets to address the US’s semiconductor dependence on Asia, particularly Taiwan, which produces 60% of chips and 90% of advanced chips. By 2030, the goal is for the US to manufacture 20% of the world’s most advanced chips, a shift supported by recent funding awards to companies like Intel (NASDAQ:INTC), TSMC (NYSE:TSM), GlobalFoundries (NASDAQ:GFS), Microchip Technology (NASDAQ:MCHP), and BAE Systems.

However, challenges loom, including market fluctuations and labor shortages, which have led to delays in projects by TSMC and Intel. Despite potential setbacks, investing in domestic chip production is viewed as strategically vital for long-term security and reducing reliance on foreign chip imports.

Featured Image: Freepik

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