US government doles out paltry $35 million of the $52 billion CHIPS Act, warns of possible delays in Intel and TSMC fab buildouts

GlobalFoundries
(Image credit: GlobalFoundries)

The U.S. Department of Commerce announced its first semiconductor manufacturing incentive as part of the CHIPS and Science Act this week. BAE Systems, which makes various chips for applications such as fighter planes, is set to get $35 million from the U.S. government. U.S. Commerce Secretary Gina Raimondo said that she expects to announce a dozen funding awards over the course of next year. Meanwhile, she warned that some fab projects could still be delayed.

"Next year we will get into some of the bigger ones with leading-edge fabs," Raimondo is reported to have said, according to Reuters. "A year from now I think we will have made 10 or 12 similar announcements, some of them multi-billion dollar announcements."

Meanwhile, Gina Raimondo has mentioned a significant challenge in expanding America's semiconductor industry: the potential for delays caused by standard environmental reviews. To a large degree, this poses a conflict between environmental regulations and national security goals.

"Obviously we want to do everything always to protect the environment," Raimondo told Bloomberg. "But this is a national security priority, and we need to move quickly."

Raimondo is concerned that these environmental permitting processes take a long time, which she fears could halt construction for years. This issue gained prominence after her request to exempt federally-funded chip projects from such reviews was rejected by House Republicans. As a result, major projects by companies including Intel, Micron, TSMC, and Samsung that cost tens of billions of dollars are at risk of being slowed down by these reviews.

Right now, the U.S. makes about 12% of the world's chips, down from 40% in 1990. The government's goal is to push that up to around 20%, which is a big jump. This whole effort is backed by the $39 billion CHIPS fund. The plan is to help each project with 5% to 15% of what they need to spend, but not more than 35% in total.

Part of the plan is to set up at least two advanced manufacturing hubs in the U.S. (such as those built by Intel and TSMC), then to restart making advanced memory chips (Micron has already announced such plans), and establish leading-edge packaging facilities (which Intel is already doing). There's also a focus on meeting the military's needs for different kinds of chips. There is a lot of interest, with over 550 companies indicating they are keen to participate, and nearly 150 putting in applications or proposals.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. 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.

  • washmc
    To a large degree, this poses a conflict between environmental regulations and national security goals.
    Environmental protection should also be a national security goal if people weren't so short sighted...
    Reply
  • bit_user
    Josh Mahurin said:
    Environmental protection should also be a national security goal if people weren't so short sighted...
    Yeah, I think a big problem is just separating out the complaints that are really just NIMBY (Not In My Backyard) and people who are reflexively opposed to anything being built anywhere, from real concerns about irreparable and unmitigated damage to unique ecosystems.

    We need to be able to build stuff, and even if we don't build it here, it's going to be built at some environmental cost, somewhere. So, I'm all for having a sane review process, but it definitely should be streamlined to reduce noise and the potential for local politicians to meddle too much in the process (perhaps more on behalf of themselves than their constituents).
    Reply
  • TCA_ChinChin
    bit_user said:
    Yeah, I think a big problem is just separating out the complaints that are really just NIMBY (Not In My Backyard) and people who are reflexively opposed to anything being built anywhere, from real concerns about irreparable and unmitigated damage to unique ecosystems.

    We need to be able to build stuff, and even if we don't build it here, it's going to be built at some environmental cost, somewhere. So, I'm all for having a sane review process, but it definitely should be streamlined to reduce noise and the potential for local politicians to meddle too much in the process (perhaps more on behalf of themselves than their constituents).
    I feel like a lot of the current concerns with the Intel and TSMC buildouts are based on legitimate points. The water usage and local resources of some of the facilities should definitely be researched more rather than less. I'm all for more facilities but building them in the middle of arid climate states that already struggle managing water for comercial and residential usage seems ripe for red tape and environmental concerns.
    Reply
  • bit_user
    TCA_ChinChin said:
    I'm all for more facilities but building them in the middle of arid climate states that already struggle managing water for comercial and residential usage seems ripe for red tape and environmental concerns.
    Agreed, but I'm not sure that's what the environmental permitting process concerns are primarily about.

    I think you're probably referring to TSMC's plant in Arizona, but I think Intel's most recently-announced plant is in Ohio, BTW. They have plenty of water.
    Reply
  • TCA_ChinChin
    bit_user said:
    Agreed, but I'm not sure that's what the environmental permitting process concerns are primarily about.

    I think you're probably referring to TSMC's plant in Arizona, but I think Intel's most recently-announced plant is in Ohio, BTW. They have plenty of water.
    Yeah I'm mostly concerned about the TSMC plant in Arizona. It's already been in the news for a variety of reasons, but environmental concerns seem pretty relevant in Arizona's case. The recent Intel plant I really have no problem with on a water use level, but large manufactoring plants should always go through rigorous environmental checks. I'm not a NIMBY, but having adequate EPA investigations and research is always relevant. I don't think this article points out in particular what environmental permitting or checks they are going through, but I imagine water use and disposal is a large part of what needs to be checked for manufactoring in general.
    Reply