U.S. Plans Up to $1.6 Billion in Funding for Packaging Computer Chips

🌈 Abstract

The article discusses the U.S. government's plan to invest $1.6 billion in funding to develop new technology for packaging computer chips, as part of the CHIPS Act. This is a major thrust in U.S. efforts to stay ahead of China in creating components needed for applications like artificial intelligence. The funding will help companies innovate in areas such as creating faster ways to transfer data between chips in a package and managing the heat they generate.

🙋 Q&A

[01] Advertisement

1. What is the purpose of the proposed $1.6 billion funding?

• The proposed funding is intended to stoke chip packaging, a process that helps drive progress in semiconductors but that takes place mostly in Asia.
• The funding will help companies innovate in areas such as creating faster ways to transfer data between chips in a package and managing the heat they generate.
• The funding is part of the CHIPS Act and is aimed at enabling leadership in high-performance computing and low-power electronics, both needed to enable leadership in AI.

2. What is the current state of chip packaging in the U.S.?

• The U.S. share of chip packaging activity has dwindled to around 3%, with most of it happening in Asia.
• U.S. reliance on foreign companies, particularly Taiwan Semiconductor Manufacturing Company (TSMC), for chip packaging has worried policymakers due to China's territorial claims on Taiwan.

3. How does the new funding aim to address the U.S. dependence on foreign chip packaging?

• The new grants are part of a plan called the National Advanced Packaging Manufacturing Program, which will receive about $3 billion in total funding.
• The funding is intended to help U.S. companies stay on the cutting edge of chip packaging technology and reduce the country's dependence on foreign companies.

[02] CHIPS Act and Chip Packaging

1. What is the focus of the CHIPS Act funding?

• The CHIPS Act received bipartisan approval to invest $52 billion to stoke domestic chip production, with most of the money directed toward the factories that turn silicon wafers into chips.

2. How does the new $1.6 billion funding differ from the CHIPS Act funding?

• While the CHIPS Act funding is focused on the early stage of manufacturing, the new $1.6 billion funding is specifically targeted at developing new technology for chip packaging.
• This is because the U.S. share of advanced chip packaging is even more stark, accounting for only about 3% of the global activity.

3. What are the challenges with the current chip packaging landscape?

• Chip packaging mainly takes place in Taiwan, Malaysia, South Korea, the Philippines, Vietnam, and China, with the U.S. accounting for only about 3% of advanced chip packaging.
• This means that chips produced in new U.S. factories might then be flown to Asia for packaging, which would do little to reduce dependence on foreign companies.

[03] Industry Initiatives and Partnerships

1. What are some industry initiatives to address the chip packaging challenge?

• Resonac, a company based in Tokyo, announced a new consortium with nine other Japanese and U.S. companies to focus on packaging research and development in a new facility that will be built in Union City, California.
• The Commerce Department also plans to announce its conceptual model for the National Semiconductor Technology Center, a proposed public-private partnership for chip research and development that is expected to include new facilities.

2. How are U.S. companies responding to the chip packaging challenge?

• Intel, a Silicon Valley chip maker, is considered a leader in packaging research and has invested heavily to upgrade factories in New Mexico and Arizona as part of broader efforts to compete with TSMC in manufacturing services.
• U.S. companies could use the federal money to help stay on the cutting edge of chip packaging technology.

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