June 18, 2021

Senate Approves $52B for Chip R&D, House Debate Looms

3 min read
The focus on U.S. efforts to re-shore semiconductor manufacturing shifts to the House of Representatives...

The focus on U.S. efforts to re-shore semiconductor manufacturing shifts to the House of Representatives after the Senate approved landmark legislation this week that allocates $52 billion for domestic chip research and manufacturing.

The catch-all U.S. Innovation and Competition Act advanced by the Senate by a vote of 68-32 funds provisions of last year’s CHIPS for America Act and the fiscal 2021 defense spending bill. Reflecting the urgency wrought by disrupted IC supply chains and resulting chip shortages, the Senate’s “emergency supplemental appropriations” include $49.5 billion allocated over five years to implement Commerce Department semiconductor initiatives.

The lion’s share of that funding is designated for industry incentive programs designed to stimulate chip R&D in areas such as advanced packaging. In an effort to stem the short-term chip shortage, $2 billion also was allocated for “legacy chip production” aimed at the hard-hit automotive sector and national security applications.

The emergency fund also includes $10.5 billion in “upfront” appropriations to establish a National Semiconductor Technology Center and a National Advanced Packaging Manufacturing Program. Those funds would be allocated over the next five years.

The Senate version also provides funding in support of U.S. 5G wireless initiatives, including Open RAN. “Open RAN not only has the support of U.S, carriers, it has the support of U.S. vendors of all sizes, along with a range of non-traditional vendors and technology firms,” the Senate bill notes.

As part of a proposed USA Telecom Act, the Senate appropriations include $1.5 billion for a “Public Wireless Supply Innovation Fund.” The goal is spurring innovation in open, software-defined wireless technologies offering a “leap-ahead” alternative to Chinese telecom equipment providers, most notably Huawei and ZTE.

CHIPS Act funding also includes $500 million to support provisions of the telecom act designed to strengthen semiconductor supply chains while boosting the security of wireless technologies.

Sen. Mark Warner, D-Va., was an early and vocal supporter of the CHIPS Act as well as 5G wireless provisions in the telecom legislation. (Warner was a wireless industry entrepreneur before entering politics.)

President Joe Biden displays a SkyWater Technology wafer during a recent White House tech summit. (Photo credit: Patrick Semansky, AP)

“America’s innovation in semiconductors undergirds our entire innovation economy,” Warner said in a statement praising Senate passage. “But for too long, the U.S. has allowed competitors like China to out-invest us. No more. This bill makes a major, $52 billion investment in domestic semiconductor manufacturing, which will create good-paying jobs in America while maintaining our global innovation edge.”

“The [Senate] bill is the product of a great deal of horse trading,” noted Robert Atkinson, president of the Washington-based Information Technology & Innovation Foundation. As the House prepares to take up its version of the legislation, Atkinson urged lawmakers to “authorize considerably more funding for industry-relevant R&D, manufacturing programs, and reshoring key industries such as semiconductors.”

In praising Senate passage, SkyWater Technology CEO Thomas Sonderman said targeted funds for chip R&D would “create solutions for re-shoring semiconductor manufacturing infrastructure [that] will strengthen critical sectors of the U.S. economy.”

SkyWater, Bloomington, Minn., announced a public-private partnership earlier this year to create an advanced IC packaging operation in Florida. Packaging capabilities are widely seen as one way to move up the semiconductor manufacturing learning curve as advanced processors with multiple chips are integrated in packages rather than on silicon.

“The production of semiconductors in the U.S. has been declining for decades,” Sonderman noted in a statement. “It’s time for a market recalibration. We need to immediately begin re-shoring American semiconductor manufacturing.”

In parallel with Senate deliberations, the Biden administration conducted a 100-day review of U.S. supply chain vulnerabilities. Along with endorsing legislation providing “at least $50 billion” for chip R&D and domestic manufacturing, the review also calls for securing domestic supply chains for advanced lithium-ion batteries.

Attention now turns to the House, where observers note Democratic leaders have yet to stake out positions on measures like funding chip R&D. Meanwhile, top House Republicans have called for developing a separate competitiveness package, a legislative step that could take most of the summer and push into the fall a House-Senate conference reconciling the two versions.

The post Senate Approves $52B for Chip R&D, House Debate Looms appeared first on EETimes.

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