(Bloomberg) -- President Joe Biden’s administration plans to launch a $5 billion semiconductor research consortium to bolster chip design and hardware innovation in the US and counter China’s efforts to capture the cutting edge of the industry.
Officials on Friday are set to formally establish the National Semiconductor Technology Center, or NSTC, which marks the second major research and development investment from the 2022 Chips Act following a $3 billion advanced packaging initiative.
The consortium plans to invest hundreds of millions of dollars into workforce development and will offer grants for semiconductor research, Commerce Undersecretary for Standards and Technology Dr. Laurie E. Locascio said in an interview. Officials also aim to open funding applications for packaging research projects in early March, a Commerce spokesperson said.
Officials are working to prevent China from benefiting from NSTC-funded research while filling gaps in the US research ecosystem for key areas like packaging and hardware, she said, as electronic components have become a key US-China battleground.
“They’re investing quite a few dollars on chip design and chip manufacturing in China right now, as our main competitor,” Locascio said. “We are clearly thinking very, very hard about how we put up the right guardrails within our funding opportunities – how we protect IP, how we develop research security programs.”
Locascio said it is too early to say whether those funding rules could include a ban on any collaboration with Chinese researchers or universities, but added that US officials are “laser focused” on research security.
The Chips Act set aside $39 billion in manufacturing incentives and $11 billion for research and development to revive the American chip industry after decades of production shifting to Asia. While much of public focus has concentrated on subsidies for companies building factories in the US, the administration has also been standing up a research arm that some industry experts say may prove the more critical effort in the long term.
While the Commerce Department has touted the effort as speedy, there’s growing frustration among major chip companies that have yet to see a single dollar of federal support 18 months after Biden signed the Chips Act into law.
Commerce Secretary Gina Raimondo said at an NSTC launch event Monday that there will be a “drumbeat of even bigger announcements” in the next six to 12 weeks. Bloomberg reported earlier that officials were targeting big announcements by the end of March, seven weeks away.
Officials have not yet selected a location for NSTC headquarters. Investments from the consortium want to complement private spending and “make accessible” chip capabilities across the country, Locascio said, without naming specific locations. Arizona, Texas, Ohio and New York have each won major factory investments, and Indiana is slated to secure one as well.
“There are states that are definitely all-in on this initiative,” said Deirdre Hanford, a longtime Synopsys Inc. executive who was recently tapped as chief executive officer of Natcast, the nonprofit entity which will operate the NSTC, in an interview with Bloomberg News. “And then there are other states that could similarly transform their industry.”