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CHIPS and Science Act 2022

By Will Morgan, Partner

The CHIPS and Science Act 2022, signed into law by President Joe Biden on 9 August 2022, promises close to $250 billion of federal investment over five years into research and development (R&D), science and technology. This is the largest publicly funded R&D program in US history. The legislation aims to trigger a renaissance of the domestic chip-making industry, reducing reliance on overseas fabrication, as well as tackling supply chain issues which hamper the semiconductor market.

$76B to build US semiconductor manufacturing and wireless technology

The Act promises $76 billion[1] to re-establish US leadership in semiconductor manufacturing and wireless technology including $39 billion to build, expand and modernize US domestic semiconductor fabrication facilities, as well as a 25% investment tax credit for capital expenses for manufacturing of semiconductors and related equipment.

To receive funding, businesses are required to demonstrate significant working and community investment in the US, as well as ensuring that the development of existing fabs and the creation of new fabs is conducted outside of China and other “countries of concern”. This will pose a challenge for many existing companies, who may need to rethink their global manufacturing strategies if they want to take advantage of the funding.

Nonetheless, some major players have already jumped on the bandwagon. Idaho-based Micron Technology has announced a $40 billion investment[2] in US memory manufacture, promising the creation of 40,000 new American jobs. California-based GlobalFoundaries (GF) and Qaulcomm have jointly announced an extension to their US-based collaboration in the manufacture of Qualcomm’s FinFET platforms used in 5G transceivers, Wi-Fi and IoT. And only last year, Intel announced[3] two new chip foundries at the Arizona-based Ocotillo campus.

$169B for research and innovation

A whopping $169 billion has been earmarked for investment into research and innovation, including, $26 billion[4] to accelerate development of new products in the US, investing in university tech transfer and patent protection for emerging technologies. A further $10 billion[5] has been allocated to the creation of regional technology hubs to attract private sector investment.

The investment will be targeted at ten technologies identified as critical: AI, high-performance computing, quantum, robotics, natural disaster prevention and mitigation, advanced communications, biotech, data storage, clean energy, and material science.

This investment provides real hope for improved translation of technologies from lab to market, in addition to providing support to universities and small to medium size enterprises for accelerated innovation.

A promising initiative

In principle, the CHIPS and Science Act 2022 seems like a great way to fuel investment in the semiconductor industry of the US and its allies. Whether the initiative solidifies into a practical realization of the goal remains to be seen.

Get in touch with our Semiconductor team

The opportunities for innovation in the semiconductor industry increase by the day and our attorneys have technical experience across the entire semiconductor lifecycle. This experience coupled with outstanding IP capability and commercial insight gives our clients peace of mind that the right technical expert with the right IP skillset is handling their IP.

If you have an IP query, large or small, do not hesitate to get in touch – wmorgan@hlk-ip.com

[1] https://www.commerce.senate.gov/services/files/F8A678E7-7CED-4093-95E8-2C12E0234BA1

[2] https://investors.micron.com/news-releases/news-release-details/micron-announces-40-billion-investment-leading-edge-memory

[3] https://www.intel.com/content/www/us/en/newsroom/news/intel-breaks-ground-two-new-leading-edge-chip-factories-arizona.html#gs.9kjh8q

[4] https://www.commerce.senate.gov/services/files/F8A678E7-7CED-4093-95E8-2C12E0234BA1

[5] https://www.commerce.senate.gov/services/files/F8A678E7-7CED-4093-95E8-2C12E0234BA1

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