Smart incentive use is always tied to a larger economic development strategy. Nearly every presentation we give starts with this reminder. A clear statement on why governments are using incentives helps guide effective incentive design and use. It also suggests how the incentive should ultimately be evaluated.
The CHIPS Act incentives for semiconductor manufacturing are no different. Last week, the CHIPS office laid out the federal government’s Vision for Success for the CHIPS Incentives Program. The previous week in a speech at Georgetown University, Commerce Secretary Gina Raimondo described how the success of the CHIPS program would be evaluated.
Secretary Raimondo stated that the program will be measured on two key imperatives:
- Whether it enabled the US to build a reliable and resilient semiconductor industry that protects America’s technological leadership for coming decades
- Whether the government was a good steward of taxpayer dollars, with transparency and accountability to taxpayers
The Vision for Success: Commercial Fabrication Facilities lays out the following objectives to be met by 2030 in support of those imperatives:
- The US will have at least two new large-scale clusters of leading-edge logic fabs with a multiple fabs, a robust supplier ecosystem, R&D facilities, specialized infrastructure, and a large, diverse, and skilled workforce with well-paying jobs. Notably, “the US Department of Defense and national security community will have access to secure leading-edge logic chip manufacturing in a commercial production environment in the United States.”
- The US will be home to multiple high-volume advanced packaging facilities and be a global technology leader in commercial-scale advanced packaging for both logic and memory chips.
- US-based fabs will produce high-volume leading-edge dynamic random-access memory (DRAM) chips on economically competitive terms. R&D for next-generation memory technologies will be conducted in the US.
- The US will have increased its production capacity for the current-generation and mature-node chips most vital to US economic and national security, with an emphasis on compound semiconductors and other specialty chips.
These objectives matter, according to the Vision document, because semiconductors are critical inputs to many industry sectors in the US economy. They also underpin critical infrastructure, power nearly all military technology, and are foundational to advanced technologies expected to shape the future. Attaining a competitive position also means addressing costs and sustainable operations.
A core priority for the CHIPS Program Office is to help the United States once again produce the most advanced chips at competitive scale on a sustainable basis.CHIPS for America. Vision for Success: Commercial Fabrication Facilities. CHIPS Incentives Program. February 28, 2023
[I]f we do this right, by the end of the decade, we’ll cut in half the projected cost of moving a new chip from concept to commercialization.Remarks by U.S. Secretary of Commerce Gina Raymond: The CHIPS Act and a Long-Term Vision for America’s Technological Leadership. February 23, 2023
There are many more important details involved in the CHIPS Act incentives, but we expect that these themes will remain critical touchstones in the process. Applicants that make the best case for supporting these objectives, advancing US leadership in the semiconductor industry, and supporting US national and economic security will be in the best position to access the incentives.
Will the program be considered a success if these objectives are attained? How will data on the objectives be collected and reported to the public? What other factors will the public use to assess whether taxpayer dollars were spent well and wisely? We will examine additional themes, application requirements, and evaluation criteria for the incentives in forthcoming blog articles.
** Photo credit: Photo by Adi Goldstein on Unsplash