Here’s where the last $6 billion in CHIPS Act semiconductor award money is going

The
rollout
of
the
Biden
administration’s
CHIPS
Act
award
money
has
so
far
focused
on
providing

major
awards
for

major
companies,
with
just
four
leading-edge
semiconductor
manufacturers
receiving
the
lion’s
share
of
the
$33
billion
that
has
been
allocated
to
this
point.

Now,
with
$6
billion
remaining,
the
focus
is
shifting
to
sending
smaller
awards
to
smaller
companies—dozens
of
them,
up
and
down
the
supply
chain.

The
goal,
government
officials
and
industry
experts
say,
is
to
leverage
the
remaining
grant
money
to
lure
in
as
much
private
investment
as
possible,
while
boosting
supply
chain
resilience
and
economic
security
by
funding
U.S.-based
facilities
in
areas
like
materials
and
packaging.

“We
are
really
focused
on
investing
across
the
semiconductor
ecosystem,”
Michael
Schmidt,
director
of
the
CHIPS
Program
Office
at
the
Commerce
Department,
told
CNBC. 

That
means
funneling
investments
to
both
upstream
suppliers
–
companies
providing
materials
and
equipment,
for
example
–
and
downstream
players,
such
as
those
involved
in
the
advanced
packaging
that
takes
place
after
a
semiconductor
is
produced.
Schmidt
said
some
current
mature
technologies,
also
known
as
legacy
chipmakers,
will
likely
be
in
line
for
a
piece
of
the
remaining
funds
as
well.

“Once
we
begin
to
rebuild
that
ecosystem
in
this
country,
once
we
begin
to
rebuild
the
scale
that
we
expect
to
see
in
this
country,
I
think
that
will
create
ongoing
investments,
investment
dynamics
and
continue
to
make
it
attractive
for
companies
to
invest
in
the
future,”
he
said.

The
question
of
where
the
remaining
CHIPS
Act
award
money
will
be
headed
is
looming
large
now
that
the
Commerce
Department
has
announced
recipients
for
nearly
85%
of
its
grant
money
and

has
committed
to
allocating
the
remaining
funding
by
the
end
of
the
calendar
year.

Hundreds
of
companies
are
still
vying
for
a
piece
of
the
money
that
remains:

More
than
600
initially
submitted
statements
of
interest,
Commerce
Secretary
Gina
Raimondo
said
in
February,
but
only
nine
have
received
awards
so
far.

Intel,


Taiwan
Semiconductor,


Samsung
and


Micron
combined
will
receive
nearly
$28
billion,
while


GlobalFoundries
received
$1.5
billion
and
four
smaller
companies
–

BAE
Systems,


Microchip,
Polar
Semiconductor
and
Absolics
–
received
a
combined
$392
million.
Another
$3.5
billion
has
been
set
aside
for
the
“secure
enclave”
program,
which
will
produce
semiconductors
for
military
use.

The
set
of
awards
announced
so
far
highlights
how
the
focus
at
the
Commerce
Department
has
been
on
what’s
known
in
the
industry
as
“front-end
manufacturing,”
or
the
production
of
wafers
themselves,
said
Paul
Triolo,
technology
policy
lead
at
the
Albright
Stonebridge
Group. 

Triolo
attributed
that
focus
to
both
“the
highly
political
nature
of
the
awards,”
and
a
need
to
show
progress
in
the
near-term
on
advanced
manufacturing
capacity,
he
wrote
in
an
email
to
CNBC. 

But
Raimondo

has
pledged
to
build
out
the
U.S.
chip
supply
chain
from
end
to
end
by
2030.
Achieving
that
“will
require
considerable
juggling
of
awards
to
upstream
and
downstream
players
in
the
supply
chain,”
Triolo
wrote.

Schmidt
emphasized
that
the
Commerce
Department’s
focus
is
already
on
getting
funding
to
all
of
those
players,
and
that
there
will
be
“significant
investment”
throughout
the
supply
chain.

Plus,
given
that
the
awards
announced
so
far
have
already
prompted
pledges
from
private
companies
to
invest
more
than
$300
billion
in
leading-edge
production,
Schmidt
said
he
expects
“an
enormous
amount
of
secondary
investment”
to
soon
benefit
the
smaller
suppliers. 

Commerce
has
also
set
aside
$500
million
in
award
money
specifically
for
the
companies
whose
projects
will
total
$300
million
or
less
in
capital
investment.

“We’ll
really
be
seeing
those
benefits
across
the
industry,”
Schmidt
said.
“And
I
still
think
we’re
going
to
be
making
very
significant
investments
in
the
upstream
supply
chain
and
really
building
out
an
overall
portfolio
that
is
advancing
economic
and
national
security
interests.”

One
such
supplier
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
chief
executive
Americo
Lemos
told
CNBC
that
while
he
understands
the
interest
in
funding
leading-edge
chip
manufacturing
in
order
to
build
out
artificial
intelligence
systems,
funding
smaller
companies
that
play
support
roles
is
just
as
crucial
to
ensuring
the
U.S.
chip
supply
chain
is
both
secure
and
resilient.

“We
need
to
make
sure
that
we
continuously
look
at
the
supply
chain
as
a
whole,
in
an
environment
where
geopolitics
aren’t
easy
to
deal
with,”
Lemos
said
in
an
interview. 

“Of
course
the
industry
is
focused
on
AI,
GenAI
and
its
benefits
and
applications,
but
it’s
not
enough
to
build
high
performance
chips,”
he
continued.
“There’s
no
AI
without
compound
semiconductors—very
simple.”

With
the
remaining
grant
money
dwindling,
forthcoming
awards
will
be
smaller
than
the
multi-billion-dollar
packages
that
have
been
doled
out
so
far,
Schmidt
said.
But
for
small
companies,
even
a
modest
award
could
have
significant
impact.

“There’s
a
lot
that
a
smaller
amount
of
money
can
do
for
those
upstream
projects,”
said
Jimmy
Goodrich,
senior
advisor
for
technology
analysis
with
the
RAND
Corporation.
“There’s
a
lot
of
runway
left.”