U.S. officials have tough choices to make in doling out billions in taxpayer dollars to private companies to accomplish a goal of bringing cutting-edge artificial intelligence semiconductor chip development and manufacturing to American soil.
The CHIPS and Science Act provides $52.7 billion for American semiconductor research, development, manufacturing, and workforce development.
This includes $39 billion in manufacturing incentives, including $2 billion for the legacy chips used in automobiles and defense systems, $13.2 billion in R&D and workforce development, and $500 million to provide for international information communications technology security and semiconductor supply chain activity.
The Commerce Department rolled out the funding applications for the CHIPS for America program last February. The funds are expected to start flowing in the next few weeks.
In a speech last month, Commerce Secretary Gina M. Raimondo said, "U.S. companies lead the world in driving AI forward, dominating the design of AI chips and the development of Large Language Models. But we don't manufacture or package any of the leading-edge AI chips needed to fuel the innovation ecosystem and power our most critical defense systems."
The Biden administration has to decide how much to give to foreign leader Taiwan Semiconductor Manufacturing (TSMC) and beleaguered U.S. company Intel which is undergoing turnaround efforts, Reuters reports.
"We have decided to prioritize projects that will be operational by 2030," Raimondo said. "There are worthy proposals with plans to come online after 2030 that we say no to in order to maximize our impact in this decade."
Samsung Electronics is also requesting some of the money and is the only other firm in the world that can make advanced chips, according to Reuters.
Intel, TSMC and Samsung are building factories in the U.S. The main question is how much of the money each company will receive.
"At the outset, we said that we expected to invest about $28 billion of the program's $39 billion in incentives for leading-edge chip manufacturing. But leading-edge companies alone have requested more than $70 billion, meaning we're having many tough conversations," Raimondo said.
