Biden administration to boost domestic semiconductor industry with $238 million grant

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This funding is part of a larger $53 billion package approved by Congress and the administration to bolster the U.S. semiconductor sector. The majority of these funds are expected to be disbursed this fall through various programs run by the Commerce Department.

While U.S. firms continue to design many of the world’s leading chips, manufacturing has largely been outsourced overseas, particularly to Taiwan. This situation has left the U.S. chip supply susceptible to potential disruptions such as geopolitical instability.

The newly announced grants will be allocated to research institutions, consortiums, and universities. Each hub will receive between $15 million and $40 million for creating innovative chips for applications including electromagnetic warfare, artificial intelligence, 5G and 6G wireless technologies, and quantum computing.

These hubs are intended to address technical challenges relevant to defense missions and facilitate the transition of new chip technologies from lab-based innovations to commercially viable products. This initiative is anticipated to bring more prototype work to the U.S., thus increasing domestic manufacturing capabilities.

In parallel with this initiative, the Commerce Department is establishing a series of research hubs for the semiconductor industry under the National Semiconductor Technology Center banner. This project is supported by an $11 billion fund for research and development and is set to be officially unveiled this fall.

Despite acknowledging challenges such as staffing new chip plants, officials believe that if implemented correctly, these programs could position the U.S. as a global leader in chip design, research, and manufacturing.

However, concerns have been raised about the recent release of an advanced smartphone by Chinese telecom giant Huawei, which is under heavy U.S. trade restrictions. While officials expressed disappointment at this development, they stressed that there is no evidence that Chinese companies can produce the more sophisticated chips on a large scale.

The U.S. government maintains that it can implement various measures to limit China’s access to advanced technology but emphasizes that offensive strategies are more effective. The initiative reflects a broader effort to re-focus on domestic manufacturing and reduce dependency on foreign countries.

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