Biden Is Setting Up an $11 Billion Chips Network to Bolster US National Security

© Bloomberg. Joe Biden Photographer: Samuel Corum/Bloomberg

(Bloomberg) -- The Biden administration is setting up a network of advanced computer-chip design and engineering facilities, the focal point of plans to spend $11 billion on research and development to bolster US economic and national security.

The Commerce Department envisions the National Semiconductor Technology Center involving a number of new technical sites around the country, working with academic and industry partners to drive innovations in products and workforce development. The goal is to have it up and running by the end of the year.

Goals of the program include producing the latest semiconductor technology in the US; reducing the time from design to commercialization; and training workers from technicians to engineers. It aims to bring together stakeholders from across the industry, from chip designers, universities and community colleges to state and local governments, manufacturers, labor unions and investors.

The Commerce Department on Tuesday will release a paper outlining its vision and strategy for the center. On Wednesday, it will call for nominations for a selection committee that will choose a board of trustees to set up the center and act independently from Commerce. The center will be an independent nonprofit so that it’s trusted by companies in the industry and viewed as neutral and science driven, Commerce Secretary Gina Raimondo said.

“It will enable us to develop a robust ecosystem which will allow us to not just have a few new fabs in America, but to regain America’s leadership in the research and development of technologies of the future,” Raimondo said on a call with reporters.

Congress last year passed the US Chips and Science Act to return advanced semiconductor manufacturing to the US after pandemic lockdowns and supply-chain disruption laid bare American reliance on chips from Asia and particularly Taiwan, the target of frequent threats from China.

The law gives the Department of Commerce $11 billion over five years for research and development in advanced semiconductor manufacturing, development of new technologies and training workers. It’s part of a total $52.7 billion that also includes $39 billion in incentives to jumpstart production.

The plan is to try to bring production back to the US by building at least two new clusters of leading-edge logic-chip manufacturing, with a supplier ecosystem and research and development facilities, employing thousands of workers.

Still, the amounts already spent by the industry show the size of the challenge for the US program: Intel Corp (NASDAQ:INTC)., the biggest maker of computer processors, spent more than $17 billion on research and development in 2022.

Many details about the technology center have yet to be decided, such as the location of the headquarters and the sites around the country. Those decisions will be made in the coming months, Raimondo said. 

The Chips office is under the umbrella of the Commerce Department’s National Institute of Standards and Technology, which has its headquarters in Gaithersburg, Maryland, outside Washington.

One goal for the technical centers is to enable small prototyping of chips and pilot runs, which currently are cost prohibitive for many startups companies and entrepreneurs, Raimondo said. 

“It’s a place where industry and academia and startups and investors can come together to solve the biggest, grandest challenges and set priorities, which is something that is hard for companies to do in the context of their corporate structure because they’re focused on short-term engineering and making profits,” Raimondo said. “This allows everyone to step back and say ‘What are the 100X opportunities, and how do we go make them happen?”