The Creating Helpful Incentives to Produce Semiconductors CHIPS and Science Act of 2022 was successfully approved with the goal of fostering American manufacturing, supply chains, and national security. It also includes provisions to invest in research and development. The ultimate aim is to establish the United States as a frontrunner in key areas such as nanotechnology, clean energy, quantum computing, and artificial intelligence.
The CHIPS Act includes a component referred to as the International Technology Security and Innovation (ITSI) fund, which allocates USD$ 100 million per year to the Secretary of State over the next five years, this amount is intended to fund the programme that promotes global security in key technology sectors.
The fund’s priorities place significant emphasis on the semiconductor industry, alongside the development and implementation of secure information and communication technologies (ICT). Various bureaus within the Department of State are now allocating ITSI funding towards programs that specifically target the enhancement of resiliency and security in ICT and semiconductor supply chains.
In addition to the development and adoption of secure Information Communication Technologies (ICT), the semiconductor industry has become the primary funding priority. Moving forward, various bureaus within the Department of State will prioritise ITSI funding for programs that promote resiliency and security in ICT and semiconductor supply chains.
President Biden emphasised that semiconductors play an indispensable role in various aspects such as smartphones, the Internet, cars, the electric grid, national security, NASA’s Moon mission, and most notably, the computer which has become an essential daily tool for conducting our activities.
As the economy expands and the complexity of technology increases, the demand for semiconductors is rising along with it. Simple consumer goods like calculators require just a single chip, but the latest electric vehicles rely on a multitude of thousands of chips.
The impact and reach of semiconductors extend far beyond the realms of economics and science, they are also permeating into the vast landscape of the consumer-goods sector. Semiconductors find their relevance in an array of products and devices that enhance our daily lives, ranging from wearable technology to household appliances and entertainment systems. Their pervasive presence and contribution to the consumer goods sector underscore their significance in powering the seamless functionality, connectivity, and innovation that define our modern lifestyle.
Furthermore, semiconductors that can be applied also to cutting-edge computer chips are considered “dual-use goods,” meaning they have applications in both civilian and military products. Today, a significant number of advanced semiconductors can be found in warfighting technologies and weapons modelling systems.
However, the supply chain for the most advanced semiconductors is currently characterised by its fragility and vulnerability to disruption. The semiconductor industry has gravitated towards a limited number of chip foundries, predominantly situated in a small number of countries. Additionally, only a limited number of companies possess the capability to fabricate semiconductors or engage in their manufacturing. This situation highlights the challenges faced in ensuring a robust and reliable supply chain for advanced semiconductors.
Semiconductors play a dual role as both vital components of the international economy and intricate products that are challenging to manufacture. Establishing resilience within the semiconductor supply chain is imperative for ensuring global economic security. Recognising this critical need, the ITSI Fund, which provides a substantial USD$ 500 million, aims to finance dedicated projects aimed at collaborating with international partners and allies. This collective effort seeks to bolster the stability and reliability of the semiconductor supply chain, fostering economic security on a global scale.
