US CHIPS ACT Now Approved by President Biden – What’s Next?

US CHIPS ACT Now Approved by President Biden – What’s Next?

San Diego, CA, August 9, 2022:  TECHCET—the electronic materials advisory firm providing business and technology information— announced that today President Biden signed the long-awaited CHIPs Act into law. So, “what’s next” for the US semiconductor industry?

Pres. Biden signs CHIPS Act, from news feed from US News 8/9/2022

The US CHIPS Act will attempt to level the playing field by encouraging device makers, and their suppliers, to invest in the US. Although US companies have been industry leaders in chip design, chip fabrication, fab equipment, and advanced materials, Asia’s investments and government incentives have reduced the US share in chip manufacturing and materials manufacturing over the past several decades. These Asian investments, in combination with lower costs and ease of regulatory rules, have expanded the customer base and the manufacturing supply of materials and equipment in Asia.

Some key fab projects in the US are already underway, others have been announced, and more are potentially forthcoming. While this is welcome news for the US industry, these fab projects, especially leading-edge Foundry and Memory fabs (like Intel, TSMC and Micron) take 2 to 3 years to construct and ramp into high volume production. In contrast, existing leading-edge Foundry and Memory production is already in place in Asia and has continued to expand year over year. As a result, global material suppliers have been focused on Asia. Over the past few years, many suppliers announced both new plants and plant expansions in key semiconductor-producing locations like Korea, Taiwan, China, and Japan. And material suppliers, such as DuPont and EMD, followed with nearby facilities to support some of the most advanced fabrication processes. As a result of all this activity in Asia, some may ask, “Is the CHIPS Act too little too late?”

Many of the chip companies would have liked to see the CHIPS Act approved last year, but “better late than never” is the theme we are hearing. A myriad of global events, from the COVID pandemic to trade issues, to the Russian war, has forced each country to look at its own vulnerabilities. Many countries, including the US, realize the importance of having resident chip manufacturing and development, but building a new semiconductor device factory is an expense most companies do not shoulder without government support. The CHIPS Act grants and tax incentives will help to fuel this effort, but new Chip facilities alone will not solve the shortage problem.

Without materials, you cannot build chips. “Semiconductor manufacturing is a critical and strategic industry for the nation’s economy and its national security, and so are materials,” stated Lita Shon-Roy, President & CEO of TECHCET. While some investments for materials production have already been announced, the materials supply chain is expected to encounter strains as the new high-volume chip production begins to ramp up in the US. Significant investments in materials production and R&D will be needed to strengthen the materials supply chain with advanced leading-edge chemicals and materials. TECHCET has previously identified a critical dependency on imported high-purity chemicals for US-based chip fabrication. This is especially true as critical dependencies continue to exist for high-purity chemicals, silicon wafers, and other materials. Any funding and support through the US CHIPS Act for chemicals and materials produced in the US will greatly strengthen supply chains and reduce the risk of shortages and critical dependencies on imports.

For more details on the Impact of US Chip Expansions on chemicals and materials go to:

ABOUT TECHCET: TECHCET CA LLC is an advisory services firm expert in market analysis and business development of electronic markets and supply-chains for the semiconductor, display, solar/PV, and LED industries. TECHCET offers consulting, reports, and subscription services, including the Critical Materials Council (CMC) of semiconductor fabricators and CM Data subscription services. For additional information, please contact, +1-480-332-8336, or go to