US Commerce Secretary calls for CHIPS Act 2, says American semiconductor giants need more funds for fabs

Intel
(Image credit: Intel)

U.S. Commerce Secretary Gina Raimondo emphasized the necessity for ongoing investments in the American semiconductor industry to regain global leadership and fulfill demand for artificial intelligence (AI) processors. She highlighted the significance of the U.S. government's effort to fund the chip industry amid global challenges during a virtual appearance at yesterday's Intel Foundry event, reports Bloomberg. 

"I suspect there will have to be — whether you call it CHIPS 2 or something else — continued investment if we want to lead the world," said Raimondo. 

Raimondo's remarks underscored the importance of the semiconductor sector, particularly in light of the increasing computational demands of AI technologies. She cited her discussions with Sam Altman, CEO of OpenAI, who is seeking U.S. government support for his chip venture. According to Raimondo, the sheer volume of chips required for AI applications, as projected by industry leaders, is astonishing. Meanwhile, a surplus of AI processors will enable more companies to adopt artificial intelligence, which will be a competitive advantage for the U.S. 

The U.S. government's commitment to revitalizing the semiconductor industry is evident in the 2022 CHIPS and Science Act, which allocated $39 billion in direct grants and an additional $75 billion in loans and loan guarantees. The Commerce Department is actively distributing these funds among numerous applicants, with three awards already announced to key players in the industry, including the American subsidiary of BAE Systems, GlobalFoundries, and Microchip Technology. 

Meanwhile, Intel is reportedly negotiating for over $10 billion in grants and loans to support its expansion plans, including a20 billion on initial two fabs in Ohio and a $20 billion expansion in Arizona. Pat Gelsinger, chief executive of Intel, expects an announcement about the award soon, but Raimondo remains tightlipped about the plan. 

While the U.S. Department of Commerce is yet to distribute the CHIPS Act money that it has, the very assurance of the U.S. government to revitalize the domestic semiconductor industry has attracted massive investments in the sector. Various semiconductor companies have either invested or committed to invest over $230 billion into the U.S. chip industry. These companies include Intel, GlobalFoundries, Micron, Samsung, Texas Instruments, and TSMC.

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • rluker5
    Its an election year. Whether something happens is uncertain, but there will be campaign promises made.
    Reply
  • JTWrenn
    While I am sure politics plays a huge roll, this could easily be funneled through military funds at this point because of the importance of ai and chips in security. I hope we finally get to the point where we can stand on our own when it comes to tech even if it costs more per chip. It just needs to be done to ensure we are not cut off.
    Reply
  • digitalgriffin
    This is stupid for 2 reasons:

    1) AI will sell itself. People are jumping on to invest in companies that produce AI hardware. Case in point: NVIDIA/TSMC. Gov't investment is NOT necessary.

    2) CHIPs act 1 is having gigantic regulatory issues with payouts causing fabs to stop progress. Putting a CHIPs act 2 in place when we can't get CHIPS act 1 working is just stupid.

    IF companies lack funding to build fabs, then I would be okay with the gov't subsidizing low cost loans (Inflation Rate) to companies to incentivize them to build on their own dime. That way the risk is on them to complete on schedule instead of relying on tax payer dime.

    This is just another money grab and the commerce secretary is an idiot.
    Reply
  • ezst036
    We're gonna need more lobbyists.
    Reply
  • Math Geek
    my first thought when i see " _______ industry needs funds" is to look up how much in dividends they payed out last couple years. i PROMISE, they've paid out more than they are asking for.

    all they got to do is use the money they already have, build what they need, and then realize the profit from it. you know kind of like how the free market is supposed to work !!

    instead the taxpayers gets to provide all the fab making money so the manufacturers can have 100% profit on the whole thing.......

    sharpening up my pitchfork and making some new torches
    Reply
  • brandonjclark
    digitalgriffin said:
    This is stupid for 2 reasons:

    1) AI will sell itself. People are jumping on to invest in companies that produce AI hardware. Case in point: NVIDIA/TSMC. Gov't investment is NOT necessary.

    2) CHIPs act 1 is having gigantic regulatory issues with payouts causing fabs to stop progress. Putting a CHIPs act 2 in place when we can't get CHIPS act 1 working is just stupid.

    IF companies lack funding to build fabs, then I would be okay with the gov't subsidizing low cost loans (Inflation Rate) to companies to incentivize them to build on their own dime. That way the risk is on them to complete on schedule instead of relying on tax payer dime.

    This is just another money grab and the commerce secretary is an idiot.
    I love you.

    :lov:
    Reply
  • hotaru251
    it does....but then again so does public education, healthcare, etc ect & we all know those aren't getting these type of fund meanwhile Military asks for funds & magically find something like $40,000,000,000 more than they wanted...

    yes, self sufficient tech is important for all, but so is a lot of stuff they seem to ignore.
    Reply
  • usertests
    AMD should buy back a fab somewhere in the U.S. so they can suck from that sweet teat like Intel is furiously doing.
    Reply
  • ThomasKinsley
    There are already calls for CHIPS II before CHIPS I funds are spent? I get why China's government is bankrolling their silicon industry - they don't have one. And I sort of get why the West is following China's lead in bankrolling the tech sector with CHIPS I in hopes of swiftly bringing the fab industry to the mainland to protect from the fallout of a potential Taiwanese invasion, but calling for CHIPS II is questionable at best. Raimondo advocates for it after meeting Sam Altman? Isn't this the guy who absurdly claimed he needs $7 trillion for AI fabs? Why is this even a thing?
    Reply
  • Co BIY
    digitalgriffin said:

    2) CHIPs act 1 is having gigantic regulatory issues with payouts causing fabs to stop progress. Putting a CHIPs act 2 in place when we can't get CHIPS act 1 working is just stupid.

    And that effects the logic of a government giveaway ....
    Reply