The US Department of Commerce accelerates CHIPS Act implementation, finalizing nearly $8 billion for Intel and major agreements for Texas Instruments to secure domestic supply chains.
WASHINGTON - In a decisive push to reshape the global technology landscape, the United States has aggressively accelerated the distribution of funds under the CHIPS and Science Act as 2024 draws to a close. The Department of Commerce has moved from preliminary negotiations to binding agreements with industry titans, marking a critical turning point in the nation's effort to repatriate semiconductor manufacturing. Most notably, officials finalized a massive funding package for Intel Corporation in late November, alongside significant awards for Texas Instruments and critical supply chain partners, cementing a strategy designed to reduce reliance on foreign supply chains and bolster national security.
The flurry of activity in the fourth quarter of 2024 underscores the urgency within the Biden-Harris administration to obligate the act's fiscal firepower before the year's end. With over $30 billion in private sector investments now backed by federal incentives across 23 projects, the contours of a revitalized American industrial base are becoming visible. The latest agreements target not just the leading-edge logic chips used in artificial intelligence but also the mature nodes essential for automotive and defense applications.
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On November 26, 2024, the narrative of US semiconductor recovery took its most significant step forward. The Department of Commerce and Intel Corporation announced they had reached a finalized agreement on terms to award the company up to $7.86 billion in direct funding. This capital injection is earmarked for commercial fabrication facilities, specifically targeting the development of leading-edge capacity that has largely drifted to Asia over the last three decades.
However, the government's investment in Intel extends beyond commercial interests. In a separate but parallel move on September 16, 2024, Intel was awarded up to $3 billion in direct funding for the "Secure Enclave" program. Executed by the Department of Defense in coordination with Commerce, this initiative is designed to ensure a dedicated domestic supply of chips for military and intelligence applications, shielding sensitive defense technology from global supply chain disruptions.
"With the Intel announcement, CHIPS Act funding had truly reached the leading edge... providing a huge boost to the fabs in Arizona and Ohio." - Morrison Foerster Analysis
While Intel represents the cutting edge of logic processing, the CHIPS Act strategy also prioritizes the "mature nodes" that power everyday electronics, from cars to medical devices. On December 20, 2024, Texas Instruments (TI) announced an award agreement for up to $1.6 billion in direct funding. This investment supports the construction of new fabrication plants in Texas and Utah. TI's facilities are crucial for producing the analog and embedded processing chips that are ubiquitous in modern machinery.
Furthermore, the administration is addressing upstream supply chain vulnerabilities. In October 2024, the Department of Commerce followed through on a preliminary memorandum with Hemlock Semiconductor (HSC), moving toward distributing funds based on project milestones. The award, totaling up to $325 million, supports the construction of a new manufacturing facility on HSC's existing Michigan campus. Hemlock produces hyper-pure polysilicon, a foundational material for semiconductor wafers, ensuring that the US controls the raw inputs as well as the final assembly.
The pace of implementation accelerated markedly in the second half of 2024. According to reports from IEEE Spectrum, the federal government had "proposed deals for more than 30 projects by the end of October 2024." This timeline aligns with the White House's stated goal to allocate remaining CHIPS funds by year's end.
The sheer scale of these awards signifies a paradigm shift from a market-driven global supply chain to a security-driven industrial policy. For businesses, the influx of capital comes with strings attached-milestone-based disbursements and due diligence requirements. The Semiconductor Industry Association notes that these incentives are driving historic private investment, with the government's share acting as a catalyst rather than a sole funding source.
Labor markets are also feeling the impact. The Department of Commerce projects these investments will create over 115,000 manufacturing and construction jobs. In places like Bloomington, Minnesota, Polar Semiconductor's $120 million award (agreed upon in May 2024) is already set to create 160 new jobs. However, this growth brings challenges, specifically the need for a skilled technical workforce to operate these advanced facilities.
As the major manufacturing awards are finalized, attention is shifting toward long-term innovation. The CHIPS and Science Act authorizes an $81 billion increase for the National Science Foundation through 2027 to double its budget. In February 2024, the administration announced over $5 billion specifically for R&D, including the National Semiconductor Technology Center. Moving into 2025, the focus will likely expand from breaking ground on factories to establishing the intellectual infrastructure needed to keep the US competitive in future chip generations.
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