Houston Texas Appliance Parts: U.S. Makes National Security Priority of CHIPS Subsidies

Houston Texas Appliance Parts

U.S. Makes National Security Priority of CHIPS Subsidies by Houston Texas Appliance Parts on Thursday 02 March 2023 02:21 PM UTC-05 DOC Secretary Gina Raimondo. (Source: Shutterstock) The U.S. Department of Commerce (DOC) is focusing its rules for companies that aim to win the largest part of the $52 billion in CHIPS Act subsidies on national security. Analysts told EE Times the U.S. expectations are set high. By the end of this month, the DOC will accept applications from chipmakers for $39 billion in stimulus money aimed at establishing production of the world's most advanced semiconductors in the U.S. There's no date set yet for when the first money will be awarded. "This is fundamentally a national-security initiative," DOC Secretary Gina Raimondo said in an online press conference on Monday. "Our goal is to make sure that the United States of America is the only country in the world where every company capable of producing leading-edge chips will be doing that in the U.S., at scale with a high-volume manufacturing presence and also a significant R&D presence." The U.S. leads the European Union with its effort to revive local semiconductor production, potentially leading to conflicts between the U.S. and the EU, Ondrej Burkacky, Munich-based global co-lead of the semiconductor practice at management consultancy McKinsey, told EE Times in an exclusive interview. "You can start filing requests for funding," he said. "We are not yet on that level in the European Union. We just need to be cautious that we have a certain balance between each individual case that we are looking at. If a lot of the subsidies are going into leading-edge technology and it's ignoring the mature-feature nodestechnologies that are needed, for example, for automotive and industrial—we run into a problem." The size of individual grants will be large, and the number of winners will be small, according to the DOC. The companies most likely to win multi-billion dollar subsidies are U.S.-based Intel and Micron, as well as Samsung of South Korea and Taiwan Semiconductor Manufacturing Co. (TSMC)—all of which are building new fabrication plants in the U.S. The two Asian companies are years ahead of Intel in the latest process technology. Each front-runner faces challenges, Bob O'Donnell, president of Technalysis Research, told EE Times in an exclusive interview. "Intel, in particular, has fallen fairly far behind. They've already announced a roadmap that they should catch up to TSMC, but it's several years away before they can realistically do that." To receive CHIPS subsidies, one hurdle faced by TSMC and Samsung is the fact that they have chip facilities in China. "CHIPS-incentive recipients will be required to enter into an agreement restricting their ability to expand semiconductor manufacturing capacity in foreign countries of concern for a period of 10 years after taking the money," Raimondo said. The U.S., which calls China a "strategic adversary," last year stepped up export controls and blacklisted many Chinese companies that are considered a threat to national security. "Companies that receive CHIPS money must comply with U.S. export controls," Raimondo said. "If they violate the controls, we have a strong mechanism to take the money back. We're going to be issuing very detailed regulations… that give companies a clearer sense of what the red lines are and what we will expect of them." The DOC will build accountability by releasing award funding incrementally and tying further funding to project milestones. No CHIPS dollars can be spent by subsidy winners on stock buybacks, according to the DOC. "Again, this is about investing in our national security, not enabling these companies to use our money to increase their profits," Raimondo said. Childcare a concern One unprecedented DOC requirement is that all applicants seeking more than $150 million in direct funding in CHIPS subsidies must submit a workforce plan, including affordable and accessible childcare for their workers. "We right now lack affordable childcare, which is the single most significant factor keeping people, especially women, out of the labor force," Raimondo said. "We are in an incredibly tight labor market. Labor is hard to find." The U.S. will need to triple the number of PhDs and students in semiconductor-related fields and add 100,000 semiconductor technicians over the next decade, she added. McKinsey's Burkacky said the talent shortage "across many levels is a problem. It starts with construction, and it continues in aggregate." Fab technicians, engineers and chip designers are all in short supply, he added. Two clusters of logic fabs The DOC aims to help create two clusters of leading-edge logic fabs. "Right now, in the U.S., there is no leading-edge logic production," a DOC official said, speaking on the condition of anonymity. "These clusters could be built in areas where there is [existing fab] activity. In theory, that could be built in other areas. It is really important that we focus on larger projects that are more consequential and anchor projects with respect to our economic and national security." In general, grants are expected to fall between 5-15% of a chipmaker's capital expenditures, and total potential support, inclusive of loans and loan guarantees, is not expected to exceed 35% of capital expenditures, the DOC said. "For leading-edge production, we expect the potential applicant pool to be pretty narrow, both on the logic and the memory side," the DOC official said. "That's just the structure of the industry right now." The DOC said it is very committed to building advanced packaging, as well as the upstream supply chain. Multiplier effect A successful application will provide the opportunity for grants, loans and loan guarantees. The total appropriation for the program is $39 billion, but the DOC said it can leverage a portion of that amount to support up to $75 billion in loans and loan guarantees. The impact of investment tax credits, as well as state and local incentives, should be quite substantial, according to the DOC. Later this year, the DOC will take applications from supply chain companies like suppliers of semiconductor materials and those engaged in R&D to qualify for the remaining $11 billion from the CHIPS subsidies. The post U.S. Makes National Security Priority of CHIPS Subsidies appeared first on EE Times. Pennsylvania Philadelphia PA Philadelphia March 02, 2023 at 01:00PM

Walnut California Warwick Rhode Island Washington Weatherford Texas Wheeling West Virginia White Plains New York Rockville MD. Vienna VA.
Mailbox/

March 02, 2023 at 03:37PM

Red Creek New York Morrison Bluff Arkansas Shiprock New Mexico South Union Kentucky Eloy Arizona New Eagle Pennsylvania Kula Hawaii Glasco Kansas
https://marylandvirtualmailbox.blogspot.com/2023/03/houston-texas-appliance-parts-us-makes.html/
March 02, 2023 at 05:20PM