More than a year after the CHIPS and Science Act was signed into law – granting $52 billion in subsidies for chip manufacturers to build fabrication plants in the U.S. – it has had a notable impact on semiconductor jobs, education, and overall outlook.
Though the act spurred dramatic and immediate investment in U.S. semiconductor manufacturing, some of the key gains are just starting to be seen. For example, leading semiconductor manufacturers have announced their plans to build new fabs in 2024 and 2025 and the much-anticipated location of The National Semiconductor Technology Center is still being determined. On the local level, states are beginning to match national funding with their own increased budgets and legislation.
Most recently, the Biden administration built upon the Chips and Science Act by passing the The Building Chips in America Act, or the Kelly Amendment, a bipartisan law that speeds up the review process for semiconductor research and development projects.
This article explains The CHIPS and Science Act, The Building Chips in America Act, and the progress in U.S. semiconductor manufacturing since these crucial achievements. We will also share why investment in manufacturing must be met with an equal investment in IP security.
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The CHIPS and Science Act of 2022
The CHIPS and Science Act of 2022 provided $52 billion in subsidies for chip manufacturers to build fabrication plants in the U.S. For reference, currently only 12% of all semiconductor chips are made in the U.S. This represents a 25% decrease since 1990. During this time, as U.S. semiconductor manufacturing fell, global competition increased. Manufacturing in East Asia, in particular, rose to make up 75% of semiconductor production.
This act comes amidst a global economic downturn, with lawmakers hoping that American-made chips will solve security and supply chain issues. In short, this is something the U.S. needs to reassert its historical influence on semiconductor manufacturing and ensure the future of the industry.
Tech Hubs Program
One key part of the CHIPS and Science Act is its Tech Hubs program. The program began accepting applications in summer 2023, and will notify applicants and begin granting funds later in the year.
The program seeks to diversify the U.S. semiconductor sector by building new fabs in regions outside of traditional tech hubs. To meet this goal, the U.S. Economic Development Administration will give $15 million in strategy development grants to 20 new "tech hubs" across the country.
This comes in response to highly concentrated semiconductor jobs and talent. Currently, four of the 10 largest semiconductor manufacturers are headquartered in California, while three are in Texas. Geographic diversity will be essential as the semiconductor industry faces an ongoing workforce shortage.
The National Semiconductor Technology Center
Another stand-out element of the CHIPS and Science Act is The National Semiconductor Technology Center. This space will bring together semiconductor experts in multiple disciplines, including research, design, engineering, and manufacturing.
Another goal in opening this center is facilitating more collaboration and conversation between industry leaders, academics, and those in both state and local government. The center will sponsor research grants and be a space to test emerging semiconductor technology.
As of fall 2023, the site of The National Semiconductor Technology Center has not yet been determined. Recently, Illinois Gov. JB Pritzker lobbied the White House, proposing the Chicago area as a potential site.
Back to topKeep Your IP Secure Even as the Industry Changes
The CHIPS and Science Act is a response to a constantly evolving semiconductor industry and unstable geopolitical landscape. Though it is difficult for individual organizations to control or predict where the industry will go next, teams can stay proactive and agile with tools like Helix IPLM. Watch our webinar, IP Security Infrastructure in an Uncertain World, to find out how.
The Building Chips in America Act of 2023
The Building Chips in America Act, passed in summer 2023, builds upon the success of the CHIPS and Science Act. Put simply, the amendment will streamline the process that manufacturing and development projects have to go through in order to gain approval.
The act contains several core components that make conducting environmental reviews easier. These new guidelines come as the industry responds to the larger call to enhance sustainability.
Previously, long review processes made opening a semiconductor fab – which is already a multi-year effort – more tedious. The Building Chips in America Act provides a three-part solution:
- Designating the Department of Commerce as the lead federal agency to carry out National Environmental Protection Act (NEPA) reviews.
- Omitting some projects from the NEPA review process, including semiconductor initiatives that expand existing fab sites and projects that already have state and federal permits.
- Allowing the Secretary of Commerce to partner with state governments to complete NEPA reviews.
Impact of the CHIPS and Science Act
Though it will take decades to fully reflect on and grasp the impact of the CHIPS and Science Act, some improvement is already observable a year after its passage. Overall, the act has driven $166 billion in semiconductor investments and job growth. In the years ahead, those in the industry can look forward to more fabs, a push toward semiconductor education at both the community college and university level, and a rise in job openings to reinvigorate and grow the workforce.
New Semiconductor Fabs
There are currently 67 new fabs or fab expansions scheduled to start construction by 2025, according to figures from SEMI. Here are a few of the largest developments:
- Intel will build two new fabs, a combined $20 billion investment, in Chandler, Arizona. They are slated to open in 2024. Intel also recently announced construction of two new fabs in Licking County, Ohio, and stated that the company aims to foster a "Silicon heartland" in the state.
- TSMC will build two new fabs, costing $40 billion, in Phoenix, Arizona. They will be operational in 2024 and 2026.
- Micron will build a "megafab" in Clay, New York. The multi-phase project is estimated to cost $100 billion over 20 years, but an initial, $20 billion phase will be complete by 2023. Micron will also expand their campus in Boise, Idaho.
- GlobalFoundries recently purchased 800 acres to begin building a second chip fab in Malta, New York.
Investments in Semiconductor Education and Job Creation
One of the biggest challenges for the semiconductor industry is a prolonged workforce shortage. According to data from the U.S. Census, only 28% of the semiconductor workforce is under 34 years old. For comparison, 16 to 34 year olds make up 35.3% of the overall American workforce.
Investing in education is a crucial way to reverse this decades-long trend. Recently, semiconductor programs at institutions across the country have flourished, training thousands of graduates to meet increasing industry demand.
- Purdue University launched their Semiconductor Degrees Program, which will incorporate courses in chip manufacturing and design, chemical engineering, packaging, and more.
- Arizona State University recently added a graduate certificate in Semiconductor Processing to their list of online offerings.
- The Ohio State University opened The Center for Advanced Semiconductor Education and Research Program, partnering with 10 Ohio institutions who will use the facility to complete hands-on coursework.
- The Grainger College of Engineering at the University of Illinois Urbana-Champaign will allow students to declare a Minor in Semiconductor Engineering beginning in 2024.
- Samsung has built a manufacturing apprenticeship program at Austin Community College.
According to the Institute of Electrical and Electronics Engineers, 70% of newly created semiconductor jobs will require a two-year degree, while the other 25% will call for a bachelor's, master's, or doctorate degree.
This growth in semiconductor education will be necessary as the industry prepares to add 115,000 jobs by 2030. As job openings increase, interest seems to be rising, as well. Data from Handshake, a job application platform for college students and young professionals, shows that applications at semiconductor companies increased nearly 80% between 2022 and 2023.
Back to topSecurity Considerations for the Industry
One of the biggest considerations, and benefits, to domestic-made semiconductors is national security. Recent geopolitical instability has caused concern over potential IP leakage and theft. For the U.S. Department of Defense (DoD), it is imperative to have a secure and trusted ecosystem for the design and manufacture of semiconductors. But with most of today’s manufacturing done overseas, the DoD have had major challenges executing their national security-related projects.
The automotive industry is another area that will benefit from a trusted domestic ecosystem and a more resilient supply chain. As we progress towards autonomous vehicles, compromised components could be used by malicious parties to take control of the system and cause damage and injury.
In these cases (and others), it’s clear that there is a need for component and IP provenance, along with geofencing, to reduce the likelihood of security breaches. More competitive and accessible domestic manufacturing can help solve this by keeping sensitive IP within the borders of the U.S.
Back to topThe Unified Bill of Materials (BOM)
Another way to ensure component and IP provenance is through a Bill of Materials (BOM) management system that enforces immutability across all IP and components.
In particular, an Software Bill of Materials (SBOM) will take the form of a hierarchical tree of components where each component includes the versioned implementation and important metadata that infer its state, license, compliance with standards, and other pieces of data. This SBOM should be in machine-readable format for integration into development and test traceability methodologies.
In short, the SBOM should be a complete manifest of the software delivered with the project and its current state. With the advent of IP-centric design practices in the semiconductor space, we have already seen widespread adoption of the hardware BOM (HBOM) that records the IP component versions that implement an SoC and material metadata.
Since a large portion of today’s SoCs include an embedded software component, this new governmental SBOM requirement suggests SoC developers should be managing the unified platform SBOM/HBOM as part of the development life cycle, and in some cases delivering with the final product shipment to facilitate traceability and threat detection in the target system integration.
A Complete Software/Hardware Manifest
The CHIPS Act has already begun revitalizing U.S.-based semiconductor manufacturing. It has helped secure the domestic semiconductor supply chain and mitigate concerns with national security related designs. It also built upon Executive Order 14028, which enforced software development practices that guard against cyberattacks.
Software needs hardware to run and understanding the interdependence of software and hardware is important. By applying the SBOM mandate to the entire system on a chip (SoC) manifest with a unified software/hardware BOM, we can help to ensure that the best practices outlined in the Executive Order will be applied to the entire component tree for a given SoC.
This is something that many companies have started to adopt anyway, independent of any government initiative. One could argue that without a complete BOM to reflect the full set of software and hardware components in an SoC, we are not fully addressing provenance and security issues in the design.
Leverage CHIPS Funding With Helix IPLM
Helix IPLM provides a scalable IP lifecycle management platform that tracks IP and its metadata across projects, providing end-to-end traceability, and facilitating IP reuse. With Helix IPLM in their tool suite, companies can setup the infrastructure called for by the CHIPS Act and smooth the transition to state-of-the-art, U.S.-based semiconductor manufacturing.
Connect with our experts to see how Helix IPLM can help your company stay up-to-date, scalable, and secure.