Commerce Department Allocates $400M in CHIPS Act Funding to Enhance Semiconductor Manufacturing

GlobalWafers has emerged as the latest player in the semiconductor industry to secure funding under the CHIPS and Science Act, obtaining a substantial investment of $400 million from the Commerce Department. On Wednesday, the Biden Administration, alongside the Commerce Department, revealed a non-binding preliminary memorandum of terms (PMT) aimed at facilitating this financial support, which is intended to bolster domestic semiconductor wafer production and enhance U.S. technological capabilities.

The company plans to allocate these funds towards the construction of new manufacturing facilities, which is expected to create approximately 1,700 construction jobs and 880 permanent manufacturing positions. GlobalWafers is set to invest a total of $4 billion at two locations: Sherman, Texas, and St. Peters, Missouri. The proposed Texas facility will specialize in producing 300 mm silicon wafers tailored for advanced chips, including those used in edge computing and memory applications. Meanwhile, the Missouri site will focus on manufacturing 300 mm silicon-on-insulator wafers, ideal for chips designed to operate in demanding environments, such as defense systems.

As a leading supplier in the silicon wafer market, GlobalWafers commands over an 80% share of the 300 mm segment and is responsible for approximately 90% of silicon wafers sourced from East Asia. U.S. Secretary of Commerce Gina Raimondo emphasized that this investment is a crucial step in strengthening the nation’s semiconductor supply chain. Raimondo stated, “As a result of this proposed investment, the federal administration is helping to secure our supply chains, which will create over 2,000 jobs across Texas and Missouri and ultimately lower costs while enhancing both economic and national security for Americans.”

GlobalWafers already maintains a presence in Sherman, where it plans to transition its operations to manufacture silicon carbide epitaxy wafers. These wafers are pivotal for high-voltage applications, including electric vehicle technologies and clean energy infrastructure.

Arati Prabhakar, director of the White House Office of Science and Technology Policy, noted the significance of the investment. “The semiconductor wafers emerging from today’s announcement will form the backbone of the complex chips we need to compete in the global economy. We’re bolstering our national security, advancing our clean energy transition, and creating good jobs that support families in Texas and Missouri.”

To date, funding aimed at chip suppliers has reached a remarkable $30.1 billion. The Commerce Department has established 13 preliminary partnerships with industry giants such as Samsung, Micron, Intel, and Taiwan Semiconductor Manufacturing Co. This funding initiative not only incentivizes suppliers to establish their chip manufacturing operations in the U.S. but also supports advanced chip research and development.

Recently, the Commerce Department unveiled the CHIPS for America’s National Advanced Packaging Manufacturing Program, which will offer up to $1.6 billion in funding to accelerate and expand domestic capabilities for advanced semiconductor packaging. This initiative represents a significant investment in nurturing the semiconductor sector and enhancing the country’s technological leadership.