Manufacturing
Biden Touts $166B in Planned Semiconductor Plants Since CHIPS Act
Intel is building two more fabs at its facility in Chandler, Ariz.
Photo courtesy of Intel Corp.
In the year since President Joe Biden signed the CHIPS and Science Act, which set aside more than $52 billion to boost semiconductor chip manufacturing, the U.S. Dept of Commerce has received more than 460 statements of interest for projects in 42 states, according to the White House.
The $52 billion includes $39 billion for related construction projects, among other spending authorizations. While the money has not yet reached manufacturers, the White House says the legislation has spurred more than $166 billion in announced private investment for projects.
Companies including TSMC, Texas Instruments and Bosch have announced plans for multibillion-dollar projects to build or expand fabs. Others have planned to build plants supplying fabs, or to construct new semiconductor research and development facilities, which could be eligible for CHIPS Act money under another round of funding to come.
Biden marked the Aug. 9 anniversary of the act, as well as the upcoming anniversary also this month of the Inflation Reduction Act, with a speech in Belen, N.M.
He celebrated the “record billions of dollars” semiconductor manufacturers are investing in the U.S. after years of investments overseas for cheaper labor, followed by shutting down domestic chip fabrication plants, known as “fabs.”
“A few years ago, Intel cut 700 jobs from a semiconductor fab in Rio Rancho," N. M., Biden said. “Now they’re expanding their fab with a $3.5-billion investment, creating 700 new jobs, many of which won’t require a college degree.”
Funding from the CHIPS Act for manufacturing construction projects appears to be getting closer to reaching tech firms and, as a result, builders.
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In February, Commerce’s CHIPS Program Office released a notice of funding opportunity for projects to build, expand or modernize fabs. Those applications are being accepted on a rolling basis.
In June, officials also expanded the opportunity to include facilities costing $300 million or more to produce semiconductor materials and manufacturing equipment. The CHIPS Program Office says it will begin accepting pre-applications for those projects on Sept. 1.
Other chip manufacturers such as Intel and Micron had also announced fab construction plans prior to Biden's signing the CHIPS Act, still apparently with an eye on receiving financial incentives. The “CHIPS and Science Act investments serve as a catalyst” for the sector, Al Thompson, Intel vice president of U.S. and Canada government affairs, wrote on the company website.
Intel has construction underway on projects in Arizona and Ohio and is planning an expansion of its facilities in Oregon, in addition to the New Mexico plant upgrades Biden highlighted. Thompson also credited the legislation in part for Intel’s increased investment in new technology.
“Powered by the promises of the CHIPS Act, Intel is doubling down on research and development,” he wrote.
Large fab projects have also spurred infrastructure projects in their communities. In New Albany, Ohio, where a Bechtel-led team is building the first phase of Intel’s $20-billion “megafab,” the city has local road improvement projects underway that are designed to accommodate construction traffic and future plant workers.
The Ohio Dept. of Transportation also is widening a stretch of State Route 161 in the area. New Albany officials have envisioned building additional stormwater infrastructure and other projects to accommodate growth.
While manufacturers wait to learn how much funding they may receive, John Neuffer, president and CEO of the Semiconductor Industry Association, said in a statement that it is important for government officials to collaborate with semiconductor sector experts to help implement the CHIPS Act in a timely manner and to address a shortage of workers for the sector, to realize the legislation’s “massive benefits to our country.”
Construction Requirements
Tech companies seeking some of the money will need to meet a number of requirements, including some that relate to construction. Project labor agreements are not required, but are “strongly encouraged” by the CHIPS Program Office.
Construction workers also must be paid prevailing wages. Applicants must explain how they plan to include minority-, veteran- and women-owned businesses in construction and the facility’s supply chain. In addition, applicants requesting more than $150 million must provide plant workers and construction workers with access to child care.
Funding recipients also must commit to using U.S.-produced construction materials. Biden highlighted the Buy America Act requirement in his speech, although his administration’s use of the requirements has raised some concerns regarding the cost impact for projects funded with Infrastructure Investment and Jobs Act money.
“I can insist that it all be spent on American products with American workers,” he said. “No president has paid much attention to that from either party. Guess what? I’m paying attention.”
