Uncle Sam officially opens funding gates for silicon R&D

$5B investment part of $53B bet to reboot semiconductor industry

The US government says it will inject more than $5 billion in the CHIPS R&D program, including funds to boost skills in the semiconductor sector to form the National Semiconductor Technology Center (NSTC), a new tech development testbed.

That $5 billion is coming out of an existing $11 billion tranche earmarked for research and development as part of the broader $53 billion CHIPS and Science Act package, of which another $39 billion is already in the process of being allocated to boost onshore semiconductor manufacturing in the US, chiefly by subsidizing the building of fabrication plants.

Front and center of the R&D program is the NSTC, into which the White House said it intends to sink at least $5 billion and which is now formally established as a public-private consortium by the Secretaries of Commerce, Defense, and Energy, the Director of the National Science Foundation, and Deirdre Hanford, CEO of Natcast.

The latter, the National Center for the Advancement of Semiconductor Technology, is a new nonprofit entity created to operate the NSTC consortium, and Hanford was only appointed as its CEO last month.

The idea behind the NSTC is that it will serve as a focus to bring together the players needed to speed up the pace of semiconductor R&D. This includes government and industry organizations, customers, suppliers, educational institutions, entrepreneurs, and investors.

As it is a public-private consortium, Washington hopes the NSTC will help lower barriers to participation in R&D to create a more vibrant ecosystem and deliver a skilled semiconductor workforce.

"Our first priority is to build a community whose members will help define the strategy and investments core to the semiconductor R&D ecosystem," Hanford said in a statement. She added that this represents a "once-in-a-generation opportunity" to establish a new institution to deliver the boost to the US semiconductor industry that Washington is hoping for.

The NSTC is just one of four R&D programs planned as part of the CHIPS for America funding, with the others being a National Advanced Packing Manufacturing Program, a CHIPS Metrology Program, and a CHIPS Manufacturing USA Institute.

On the advanced packaging side, the Department of Commerce said it would make available up to $300 million for R&D activities in substrates and substrate materials, and at least $200 million for the CHIPS Manufacturing USA Institute.

The latter is seen as a first-of-its-kind semiconductor manufacturing "digital twin institute," allowing engineers to experiment with manufacturing processes in pursuit of reduced costs and shortened development cycles.

For its partn, the Department of Commerce has awarded more than $100 million across 29 projects in the CHIPS Metrology program. Metrology is the science of measuring and characterizing physical and electrical properties of semiconductor wafers, and the National Institute of Standards and Technology (NIST) last year published a report, "Metrology Gaps in the Semiconductor Ecosystem," [PDF] highlighting the areas where research funds should be allocated.

The White House said it is also planning to invest hundreds of millions of dollars from the CHIPS R&D program into in the NSTC's workforce efforts. This will include the creation of a Workforce Center of Excellence with a presence in multiple regions to oversee education and training programs to address the semiconductor industry need for workers with the right skills.

"With strategic investments in R&D complementing targeted industry incentives, CHIPS for America will not only bring semiconductor manufacturing back to the US – it will keep it here for good," Secretary of Commerce Gina Raimondo said in a statement.

The US is not the only country investing its semiconductor sector - Japan is stumping up ¥45 billion ($300 million) for research into its own manufacturing technology, according to Bloomberg.

The country's Ministry of Economy, Trade and Industry is providing the funding to the Leading-edge Semiconductor Technology Center (LSTC), an agency created last year to bring together researchers across areas including nanotechnology and materials to support manufacturing at Rapidus, the chipmaker also incorporated with government backing to revive Japan's semiconductor industry.

According to global semiconductor industry body SEMI, silicon wafer shipments decreased by 14.3 percent in 2023, a sharp departure from the previous three years of consecutive growth. It blamed this on a slowdown in demand for products, coupled with inventory correction, which meant device makers largely opted to work through their stockpiles before ordering new chips. ®

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