Shulou(Shulou.com)12/24 Report--

CTOnews.com, December 13, the U.S. Department of Commerce announced this week one of the first semiconductor manufacturing incentive programs under the Chip and Science Act, and the US defense contractor BAE Systems will receive the first federal grant of about $35 million.

According to reports, BAE Systems will use the US $35 million grant to quadruple the production of its domestic Fmure 15 and 35 fighter jets as well as chips used in satellite and other defense systems. The grant is designed to help ensure a more secure supply of parts critical to the United States and its allies.

As the Commerce Department begins allocating $39 billion of federal funds authorized by Congress under the Chip and Science Act of 2022, the money is designed to encourage the construction of chip factories in the United States and attract the return of key manufacturing industries that have been lost overseas in recent decades. The subsidy to BAE Systems is the first of a number of subsidies expected in the coming months.

Us Commerce Secretary Genna Raimundo said dozens of such funding schemes are expected to be announced next year, some of which involve billions of dollars in investment. But she also warned that some chip factory projects could still be delayed.

Raimundo also mentioned a major challenge to the development of the US semiconductor industry: possible delays caused by standard environmental reviews. To a large extent, this has led to a conflict between environmental regulation and national security objectives.

"We certainly always want to do everything we can to protect the environment, but this is a national security priority and we need to act quickly," Raimundo told Bloomberg. "

Raimundo worries that these environmental review procedures will take a long time, which could delay construction for years. The issue became even more acute after Republican lawmakers rejected her request to exempt federally funded chip programs from such censorship. As a result, multibillion-dollar projects by companies including Intel, Micron, TSMC and Samsung are at risk of being slowed down by these reviews.

At present, the US accounts for about 12 per cent of the world's chips, down from 40 per cent in 1990, and the US government aims to raise it to about 20 per cent. This is supported by the $39 billion Chip and Science Act, which provides 5 to 15 per cent of the expenditure needed for each project, but not more than 35 per cent of the total.

Part of the plan is to build at least two advanced manufacturing centers in the United States, such as those planned by Intel and TSMC, and then restart production of advanced memory chips (Micron has announced such plans). And build a leading packaging facility (Intel is already doing so), the plan will also focus on meeting the military's needs for different types of chips. The program attracted a large number of companies, with more than 550 companies expressing interest and nearly 150 submitting applications or proposals.

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