Global semiconductor trade group SEMI is applauding the U.S. Senate’s plans to solve the funding gap in the 2022 CHIPS Act. The shortfall stems from a $3 billion military chip contract with Intel, for which the U.S. Department of Defense was slated to pay $2.5 billion. However, the agency later reneged on its funding commitment, leaving the Commerce Department holding the bag. The additional funds will come through the Spectrum and National Security Act, currently at its second reading at the Upper House. This bill will allow the FCC to auction off licenses in the 12.7 to 13.25 GHz frequency bands, and the proceeds will then be used to fund various government tech programs, including the CHIPS and Science Act.
This is crucial for the CHIPS Act, as its $39 billion allocation for domestic manufacturing is already being stretched as it is. Intel will receive a $10 billion payout from the CHIPS Act, more than 25% of the fund’s manufacturing budget. In addition, the company was set to receive an additional $3.5 billion to build defense chips for the American military. This was supposed to be split between $1 billion from the Department of Commerce, with the Pentagon footing the remaining $2.5 billion.
