Aiming to shift the global semiconductor landscape, the United States has initiated a $1.6 billion competition to advance its chip packaging capabilities. This initiative, led by the US Department of Commerce, seeks to boost domestic semiconductor manufacturing and reduce reliance on foreign suppliers. With emerging technologies like AI and 5G driving demand, the US is positioning itself to challenge Asia’s dominance in this critical sector. The CHIPS for America program under the Biden-Harris Administration is at the forefront of this strategic move.
Focus Areas and Funding
The competition will concentrate on five research and development areas: equipment and process integration, power delivery and thermal management, connector technology, chiplets ecosystem, and co-design/electronic design automation. Federal funding, approximately $150 million per research area, will be allocated, supplemented by industry and academic investments. This effort is a key component of the Biden-Harris Administration’s strategy to reinvigorate the US semiconductor industry.
“President Biden was clear that we need to build a vibrant domestic semiconductor ecosystem here in the US, and advanced packaging is a huge part of that,” remarked US Secretary of Commerce Gina Raimondo. “Thanks to the Biden-Harris Administration’s commitment to investing in America, the US will have multiple advanced packaging options across the country and push the envelope in new packaging technologies.”
Strategic Timing
The timing of this investment is crucial, given the global chip shortage over the past years. The US, holding only 3% of global packaging capacity, has substantial catching up to do when compared to Taiwan’s 54% share. Efforts to build high-volume packaging facilities within the US are aimed at addressing security risks associated with dependency on Asian supply chains. The initiative also builds on previous funding opportunities in the advanced packaging sector.
Comparing past announcements, previous efforts like the February 2024 funding opportunity for the National Advanced Packaging Manufacturing Program (NAPMP) focused on substrate materials. Over 100 concept papers were submitted, showing significant interest. In May 2024, eight teams were selected for funding up to $100 million each over five years. These efforts set the stage for the current $1.6 billion competition, indicating a growing momentum in US semiconductor investments.
Earlier reports highlighted concerns over the limited US capacity in semiconductor packaging and assembly, a sector where Asia has a stronghold. This new initiative represents a more aggressive and comprehensive approach to shifting the balance. Comparing the scope and scale of funding, the current competition appears to mark a significant escalation in commitment and ambition from previous efforts.
Laurie E. Locascio, Under Secretary of Commerce for Standards and Technology and NIST Director, expressed a vision for the program: “Within a decade, through R&D funded by CHIPS for America, we will create a domestic packaging industry where advanced node chips manufactured in the US and abroad can be packaged within the States and where innovative designs and architectures are enabled through leading-edge packaging capabilities.”
By prioritizing advanced packaging, the US aims to secure its leadership in semiconductor manufacturing. The investment promises to address critical factors like system performance, power consumption, and cost reduction. The competitiveness of American chip manufacturing is expected to improve significantly, driven by advances in AI and other emerging technologies.
To summarize, the US is making a substantial investment to enhance its semiconductor packaging capabilities, challenging Asia’s dominance. The move is part of a broader strategy to revitalize domestic manufacturing and reduce dependency on foreign suppliers. The competition promises to shape the future of the global semiconductor industry.
