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White House announces $5B investment in semiconductor center sought by Arizona officials

Phoenix Business Journal

The federal government said it will invest more than $5 billion in a national public-private consortium that will support research and development of advanced computer chips.

White House officials on Friday announced plans to invest in the National Semiconductor Technology Center, which will consist of a network of several advanced computer chip research and engineering facilities in the U.S., in addition to the public-private consortium.

The NSTC’s consortium brings together government, industry, customers, suppliers and academic partners to accelerate semiconductor research and development and address needs for a skilled workforce. The NSTC aims to create a Workforce Center of Excellence with a presence in multiple regions, according to federal officials.

The government’s announcement comes as state and industry officials in Arizona are leading an effort to potentially land the largest piece of the NSTC – its headquarters.

“With strategic investments in R&D complementing targeted industry incentives, CHIPS for America will not only bring semiconductor manufacturing back to the U.S. – it will keep it here for good,” Gina Raimondo, U.S. Secretary of Commerce, said in a statement. “As we create opportunities for good-paying jobs, the workforce initiatives, such as the NSTC Workforce Center of Excellence, will help ensure a diverse, skilled, and prepared workforce across the nation.”

Also on Friday, the Department of Commerce released a notice of intent to invest $200 million in the CHIPS Manufacturing USA Institute, which allows companies to replicate and experiment with semiconductor manufacturing processes at low cost.

In addition, the agency anticipates awarding more than $300 million in funding for multiple projects in substrates and substrate materials research, which are key technologies in manufacturing semiconductors.

Specific funding awards will be announced at a later date, the Department of Commerce told the Business Journal in an email.

Natcast, a nonprofit operator of the NSTC, announced a pre-membership program for those interested in joining the consortium. More information is available on Natcast’s website.

The NSTC is funded via the CHIPS Act, which earmarked more than $52 billion toward semiconductor research, manufacturing and development, including $11 billion to advance the NSTC, the National Advanced Packaging Manufacturing Program, the CHIPS Metrology Program and the CHIPS Manufacturing USA Institute.

Arizona makes case for NSTC HQ

The Department of Commerce intends for the NSTC headquarters to be a “prominent gathering place” for executive leadership to operate the consortium. In addition, a prototyping and packaging facility or technical center could be co-located in the headquarters, according to a document outlining the agency’s vision for the NSTC.

“Here in Arizona, our vision for the NSTC is to leverage our strong semiconductor research and development ecosystem,” Sandra Watson, president and CEO of the Arizona Commerce Authority, told the Business Journal last July. “We’ve got a lot of activity happening, not only at ASU, but within industry to really bring together and leverage those opportunities.”

Arizona is home to more than 200 semiconductor manufacturers and thousands of suppliers. In addition, the state exports about $4.2 billion worth of semiconductor-related products, she said.

In August 2022, the ACA launched the Arizona Semiconductor Task Force, a statewide effort to coordinate CHIPS Act efforts. Later that year, officials published the National Semiconductor Economic Roadmap, an initiative designed to advance semiconductor competitiveness and manufacturing in the U.S.

ASU gets chip funding from ACA

In December, the ACA announced a $17.5 million investment in Arizona State University to expand the state’s advanced semiconductor manufacturing and workforce training capabilities. The investment is part of a larger $100 million commitment to boost semiconductor and microelectronics research in the state.

Since 2020, Arizona has garnered more than $77 billion in private investment to support the semiconductor, battery, electric vehicle, clean energy and biomanufacturing sectors.

That investment includes TSMC’s two semiconductor fabs totaling $40 billion in north Phoenix, one of the largest foreign direct investments in state and U.S. history.

Intel is constructing two fabs totaling $20 billion at its Ocotillo campus in Chandler and Tempe-based Amkor Technology Inc. (Nasdaq: AMKR) announced in November it plans on investing $2 billion in an advanced microchip packaging and testing facility in the West Valley that’s expected to create 2,000 new jobs.

Arizona Technology Council CEO Steve Zylstra told the Business Journal last year that the state’s established history in semiconductor manufacturing coupled with the billions of dollars in new investments could boost Arizona’s chances at landing the NSTC’s headquarters or research facilities.

“I think we’re building an international brand around semiconductors,” he said at the time. “We’re drawing the world’s attention and the more attention you get, the more people start looking at you and find reasons to move operations here … I think if we get the NSTC, it will continue to build our brand and help us work toward becoming a national hub.”

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