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The new CHIPS and Science Act, signed into law by President Joe Biden on Tuesday, is the largest ever investment in U.S. technology development, and is yielding significant benefits to New Mexico and many other states.
Bipartisan legislation provides more than $250 billion in funding over the next decade to expand domestic semiconductor manufacturing, new technology research and development, and workforce training to rebuild America’s technology leadership approve the The law aims to reverse the massive exodus of chip manufacturing that has largely moved to East Asia and elsewhere over the past three decades.
This makes the US dependent on and vulnerable to global supply chains. Disruptions to global supply chains could cripple domestic production of nearly every product, from automobiles to mobile he devices, and any product that requires a chip to operate in today’s world. And as modern chip technology continues to advance, reshoring of production has become critical to create new and complex technologies such as artificial intelligence, robotics, advanced computing, and improved medical diagnosis and treatment. I’m here.
The new law aims to accelerate domestic efforts in all these areas, pouring billions of dollars into public and private initiatives across the United States. Much of that money will flow to many states, including New Mexico, where the local semiconductor industry is expanding. Thanks to the state’s national laboratories and universities, high-tech research and development outperforms many other places.
Intel Corp. and other New Mexico-based companies want to use some of the $52 billion currently allocated to chip development and manufacturing. This includes his $39 billion in grants and loans over the next five years to help build and expand factories, and his $11 billion for research and development of new chip technologies.
An additional $24 billion is available in federal tax incentives for manufacturers, which can offset up to 25% of investments in facilities and equipment.
Apart from direct spending on semiconductor development, the Act also authorizes $170 billion over 10 years to fund, among other things, technology research and development, workforce training, and 20 regional technology projects. is funding the establishment of public-private partnerships across the country to create hub. That funding can be used to advance a wide range of emerging technologies, not just semiconductors.
The U.S. Department of Commerce, along with other federal agencies, notably the National Science Foundation and the U.S. Department of Energy, oversees all funding given to the semiconductor industry and distributes research and development costs on a competitive basis.
intel expansion
The Department of Commerce still has to develop guidelines for semiconductor aid, but Rio Rancho’s Intel and other local chip technology companies say they will seek subsidies and tax incentives in the future.
Intel, which worked hard to get the bill passed, would especially benefit from federal funding, but for now, that support is expected to flow into the company’s expansion in other states. This includes building his new $20 billion “megafab” in Ohio. Intel now says it could grow to $100 billion thanks to the CHIPS Act.
It could also benefit Intel’s operations in Arizona, where the company is investing $20 billion to expand its existing manufacturing facility.
Intel CEO Pat Gelsinger said in a statement this week: “Intel is committed to restoring end-to-end leadership, innovation and manufacturing here in the United States. We have done our part and the federal government is now doing it.”
In New Mexico, the company has already invested $3.5 billion to upgrade a local factory that will be able to produce new semiconductor technology when construction is completed early next year. The upgrade will add 700 new full-time jobs at Rio Rancho, where Intel already employs about 1,900 people.
It’s unclear if Intel will be able to use federal funding for the current expansion, though it does apply to the 25% tax break, said Linda Qian, a spokeswoman for Intel New Mexico.
“We expect the Secretary of Commerce to issue guidelines for the CHIPS Act program, and we will evaluate those guidelines as they become available,” Qian told the Journal.
More importantly, CHIPS funding could help with future investments in New Mexico, especially given the Rio Rancho plant’s contribution to new chip technology development, said Intel’s vice president and CEO. said Greg Slater, Senior Director of Global Regulatory Affairs.
“With a $3.5 billion investment, it’s hard to imagine[local factories]going away any time soon,” Slater recently told the Journal editorial board. “…One of the unique things about Rio Rancho is that he is both a chip development facility and a manufacturing site.”
In fact, the upgrade will transform the New Mexico plant into a first-of-its-kind advanced chip packaging facility.
“It can open up all sorts of future possibilities,” Slater said. You will be able to do things that were less effective.”
Under Pat Gelsinger, who took over as Intel’s CEO in February 2021, the company has an aggressive investment plan to expand manufacturing capacity in both the U.S. and Europe and to better compete with East Asian chip makers. have started.
Overall, US semiconductor manufacturing has fallen from 37% of global chip production in 1990 to less than 12% today. Intel’s current goal is to grow its own manufacturing volume to 50% of his market share by 2030, with factories in the US 30% and its European-based operations 20%. Slater says it will take over.
Domestic companies also expanded
Two local semiconductor companies, 3D Glass Solutions and Skorpios Technologies, also hope to benefit from the CHIPS Act for their expansion plans.
Founded in Albuquerque in 2006, 3D Glass has created a new ceramic-based glass material for manufacturing advanced semiconductor chips. The company has raised more than $40 million in private equity, including a $24 million venture investment round last fall, and is now working to ramp up chip production for wireless communications.
Expanding from a 5,000 square foot facility in 2015 to a 40,000 square foot space near Balloon Fiesta Park, it now produces 300 wafers per month. But now, the company is upgrading the facility with new high-tech equipment to produce 1,500 wafers per month by January 2023 and 5,000 wafers per month by 2024, said Surendra, president and CEO of the company.・Mr. Surendra Mandava said.
The company plans to expand its workforce from 55 today to 80 by the end of 2023.
The expansion will require significant investment with higher production costs, which the company plans to offset through federal funding.
“We are not looking for giveaways, but we will seek business expansion support and tax credits,” Mandava told the WSJ. “We need a lot of capital to expand our business.”
The law’s workforce training investments, including $13 billion to strengthen science, technology, engineering, mathematics or STEM education, could also help build a skilled local workforce, Mandava said. added Mr.
“Since chip manufacturing has moved to other countries, fewer people are being trained for this industry,” said Mandava. “This is he one of the key advantages of his CHIPS law.”
Meanwhile, Skorpios Technologies hopes to set up a new “Nanofabrication Innovation Center” in Albuquerque to lead the local development of next-generation 3D technologies that integrate different materials into a single chip. Launched here in 2009, the company has already created a breakthrough process that fuses silicon with conventional materials used in optical communications, significantly reducing manufacturing costs and increasing operational efficiencies to save data. Speeding up transfers.
We currently manufacture our chips in our own factory in Texas. But it’s now considering moving that facility to Albuquerque, alongside the High-Tech Materials Center at the University of New Mexico and the proposed Innovation Center, which it manages in partnership with Sandia National Laboratories.
The company’s founder, president and CEO, Stephen Krasulick, said plans are still in the “concept stage” but that the local workforce could grow from about 40 to 150. However, CHIPS Act assistance goes a long way.
“As a growth company, we hope that some of the CHIPS Act funding will flow to us and not be all consumed by the big players in the industry,” Krasulick told the Journal.
DOE and laboratories
New Mexico could also get significant CHIPS funding for research and development through Sandia and Los Alamos National Laboratories. The act allocates $16.5 billion in new funding to science and innovation and $14.7 billion to upgrade and modernize the infrastructure of DOE’s 17 national laboratories.
New Mexico Democratic Senator Ben Ray Lujan played a pivotal role in securing that funding.
It’s unclear how much money will actually flow into New Mexico. But Luján and his lab director said they expected to receive both infrastructure and research funding.
“The CHIPS Act provides a framework for increasing funding for scientific infrastructure and the research we do,” said Thom Mason, director of LANL. “We expect a significant portion of it to end up in New Mexico.”
The Department of Commerce will also manage $10 billion in CHIPS funding to build 20 new “regional technology hubs” across the country. A state legislative delegation is now working to have one of them in New Mexico.
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