From the smartphones in our pockets to the cars we drive, semiconductors are the unsung heroes powering our modern world. Recognizing the critical role semiconductors play in our daily lives, Congress passed the CHIPS Act in August 2022 to boost domestic semiconductor research and manufacturing. It provides significant funding and subsidies to address the global chip shortage and enhance U.S. competitiveness in the industry.
The U.S. government passed the CHIPS Act with the goal of revitalizing domestic semiconductor research, development, and manufacturing. The act aims to strengthen national and economic security by addressing the semiconductor supply chain disruption and reversing the decline in U.S. semiconductor manufacturing capacity. With a focus on enhancing domestic capabilities, the act provides funding for the construction of semiconductor fabrication plants, research and development, and workforce training. According to SEMI, the leading industry association, the CHIPS Act has already generated more than $200 billion in private investment, fostering collaboration between academia, industry, and government.
SEI recently had the pleasure of joining clients and industry partners at the CHIPS for America: Execute for Success, 2023 Policy and Strategy Summit, where leaders at the forefront of this domestic revitalization discussed the challenges, but also the great opportunities that lay ahead in this endeavor. The summit was hosted by The Krach Institute for Tech Diplomacy at Purdue, whose Chief Growth Officer Daniel Kurtenbach commented, “The CHIPS and Science Act is an opportunity for the U.S. to regain its leading role in the semiconductor industry, and the work being done at the Krach Institute and Purdue — along with the collaborative efforts of the government, academia, and industry — is instrumental to this vital endeavor.”
Participants at the summit included Secretary of Commerce Gina Raimondo, Senator Todd Young, Purdue University President Dr. Mung Chiang, and leaders from industry and education. The room was humming with collaborative energy in a united push to, as the Commerce Secretary put it, “Get it right.”
Getting It Right
To get it right, stakeholders must understand CHIPS Act funding streams and position their organizations to properly manage and deploy investments. SEI is positioned to assist organizations on a variety of issues, such as:
Grant Application Support: Many organizations may require assistance in navigating the grant application process to access CHIPS Act funding. Consultants can provide expertise in preparing comprehensive grant proposals, ensuring alignment with program requirements, and optimizing the chances of securing funding.
Grant Management Support: On the government side, offices are quickly growing their grant management teams to prepare to deploy and oversee this massive influx of funding. The Department of Commerce will oversee $50 billion in investments over five years, and the Department of Defense will oversee another $2 billion. These offices are scaling up quickly to meet these needs and may require assistance to hire and train qualified staff to ensure business processes and technology match this larger mission.
Financial Management and Compliance: CHIPS Act funding comes with financial responsibilities and reporting requirements. Consultants can support clients in establishing robust financial management systems, implementing effective control mechanisms, and ensuring compliance with grant terms and conditions. This includes budgeting, cost tracking, risk management, and reporting to optimize the utilization of funds and maintain accountability.
Supply Chain Optimization: The semiconductor supply chain is complex in both upline suppliers and downline consumers. Optimizing it is crucial for meeting production demands efficiently. Consultants can help clients identify supply chain bottlenecks, implement strategies for enhancing resilience and efficiency, and establish robust supplier management processes. This can involve optimizing inventory management, establishing strategic partnerships, and leveraging technology solutions such as smart factories and digital twin engineering to streamline operations.
Facility Design and Construction: The construction and establishment of new semiconductor manufacturing facilities (fabs) require careful planning and execution. Consultants with expertise in project management, facility design, and construction can assist clients in developing efficient and cost-effective fab designs, managing construction projects, and ensuring adherence to industry standards and regulations.
Partnership Facilitation: The CHIPS Act emphasizes collaboration among government, industry, and academia. Consultants can play a role in brokering partnerships, fostering collaborations, and facilitating knowledge exchange among these stakeholders. This may involve organizing workshops, conferences, and forums, creating platforms for networking and information sharing, and providing guidance on intellectual property management and technology transfer.
Talent Acquisition and Development: The expansion of semiconductor manufacturing capacity necessitates a skilled workforce. Consultants can assist clients in developing talent acquisition strategies, workforce training programs, and partnerships with educational institutions to ensure a pipeline of skilled professionals to support the industry’s growth.
Risk Management: Building and operating semiconductor fabs entail significant risks. Organizations must identify and mitigate these risks, including supply chain disruptions, market fluctuations, cybersecurity threats, and geopolitical factors that may impact the industry. Skilled consultants can facilitate comprehensive risk management planning frameworks.
Competitive Landscape: With the influx of funding and increased interest in the semiconductor industry, competition for resources and partnerships may intensify. Organizations must differentiate themselves and articulate their value proposition effectively to secure funding and partnerships. Consultants can lead and facilitate human-centered design through workshops, rapid prototyping sessions, and comprehensive vision, mission, and strategic planning sessions with individuals and executive teams.
Technological Challenges: Semiconductor manufacturing is a highly specialized field with evolving technologies. Consultants should possess up-to-date knowledge of industry trends, emerging technologies, and manufacturing processes to provide effective guidance and support to their clients.
By addressing these opportunities and potential pitfalls, SEI consultants can play a vital role in supporting clients as they navigate the CHIPS Act landscape, leverage funding opportunities, build facilities, and foster partnerships to strengthen the U.S. semiconductor industry and its associated ecosystem.
Navigate the CHIPS Act with SEI
The CHIPS Act brings with it a host of challenges — but also many opportunities for growth. By recognizing the potential impact of the CHIPS Act, businesses can proactively align their strategies and leverage these opportunities to gain a competitive advantage. This may involve assessing your current capabilities and identifying areas for improvement, investing in new technologies, or building partnerships with trusted experts such as SEI. By embracing the challenges of the CHIPS Act head-on, businesses can position themselves as leaders in a rapidly expanding market, driving innovation and sustainable growth.
If you’re interested in learning more about how SEI’s seasoned consultants can help you seize the opportunities of the CHIPS Act while navigating its potential pain points, talk to someone from our team today!