'Significant Majority' of Chips Program Applicants Won't Get Funding, Raimondo Says

Most companies applying for funding under the Chips Act (see 2309220035 and 2306280038) aren’t going to get the money they want, Commerce Secretary Gina Raimondo said this week. The agency has gotten more than 600 “statements of interest” from semiconductor companies, she said, and Commerce has had to have “tough conversations” with those businesses about what kind of funding they can realistically expect.

“The brutal reality is that a significant majority of those companies expressing interest aren't going to receive funding, including many excellent proposals by strong companies that are worthy,” Raimondo said during a Feb. 26 event hosted by the Center for Strategic and International Studies.

Raimondo said the agency is aiming to invest about $28 billion of the chip program's $39 billion in incentives for leading-edge chip manufacturing, but companies involved in that manufacturing already have asked for more than $70 billion. “That means we have a lot of tough conversations,” she said. “The point of this program isn't to sprinkle a bunch of money out to as many companies as possible, even though, candidly, that would be easier. Our job is to make targeted investments in the relentless pursuit of achieving our national security objectives.”

But she also said the significant interest in the chips program has made her more optimistic about growing the U.S. semiconductor supply chain. She said she believes the program will help put the U.S. on track to build 20% of the world’s “leading-edge logic” semiconductors in America by the end of the decade. Raimondo said that percentage is currently zero.

“A year ago before we saw the applications, I didn't know exactly what we could do,” she said. “And today, I'm confidently standing before you to say by the end of the decade, we're going to go from zero to 20% of leading edge [logic chips] built in the United States of America.”

She said “the supply chains will also come along with that,” adding that the U.S. “can no longer be as vulnerable to geopolitical challenges as we are today.”

The Biden administration also believes it can become a larger hub of leading edge memory chips, Raimondo said, which are used in advanced artificial intelligence applications. She said she’s “confident” the U.S. can “become the home to the entire silicon supply chain for the production of these leading edge chips, from polysilicon production, to wafer manufacturing to fabrication to advanced packaging.”

The goal of the chips program isn’t to “build a few new fabs and call it a day,” she said. “No. It’s soup to nuts. Polysilicon to advanced packaging, everything in between, including [research and development], here in the United States.”