The Biden administration's CHIPS Act is pumping money into chip manufacturing construction at an historic rate. According to a recent report from the U.S. Census Bureau, the growth of computer and electrical manufacturing construction funding is so great that the U.S. government will add as much funding to the sector in 2024 alone as it did in the prior 27 years.
A recent tweet by Martin Chorzempa, Senior Fellow at the Peterson Institute, called attention to the surge and illustrated the meteoric spending growth of the last few years. (Be sure to expand the embedded tweet to see the full graph.) Note that the numbers shown represent realized spending numbers on construction — not just budgeted prices.
Chips Act is attracting insane amount of investment. US is now on pace to add more investment in electronics manufacturing construction this year alone as it did TOTAL from 1996 until passage of the chips act in 2020 (funding not yet secured then, but investment started) pic.twitter.com/rfBg4XKybpMay 31, 2024
The construction growth began in 2021, but its explosive boom is due to a massive boost in funding from the CHIPS and Science Act, the Biden administration's $280 billion spending package passed in 2022. The act was signed to help bolster the U.S. semiconductor industry, which accounted for effectively 0% of all advanced-process chips manufactured worldwide. Companies including Intel, Samsung, and Micron have all received billions of dollars to build new manufacturing plants in the United States. Domestic research and development is also a major focus of the funding package.
The construction funding is making a major impact on the United States' projected chip production. A recent Semiconductor Industry Association study found that the United States is due to triple its domestic chip manufacturing capacity by 2032, and is expected to be producing 30% of the world's leading-edge chips by the same year. This expectation exceeds even the government's inflated goals; U.S. Commerce Secretary Gina Raimondo boldly proclaimed a goal of 20% of the world's leading-edge chips just in February, which is now expected to be far exceeded.
Construction on most of the new plants is ongoing, like Intel's new Ohio campus which is taking over roads with its 900,000-pound loads. Intel's Ohio plant and many of its counterparts will be major players on the chip fabrication scene, with leading-edge chip process development expected to finally come to the United States, a step up from the larger and simpler processes typically relegated to U.S. fabs.
For all its expense, most of the fab construction across the country is experiencing major delays: Samsung, TSMC, and Intel are all a year or more behind schedule. This has been primarily blamed on poor regulations and makes the U.S. one of the slowest countries at chip fabrication construction in the world.
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