CHIPS Act Incentives Bolster US Analog Semiconductor Manufacturing

2025-01-16 business

Washington, Thursday, 16 January 2025.
The CHIPS Act incentives are boosting analog semiconductor production in the US, supporting expansions by ADI and Coherent, and potentially creating over 58,000 jobs in the industry.

Major Investments in Domestic Production

The U.S. Department of Commerce has announced significant CHIPS Act incentives for Analog Devices, Inc. (ADI) and Coherent, marking a substantial advancement in domestic semiconductor capabilities [1]. ADI’s expansion plans include modernizing facilities across Massachusetts, Oregon, and Washington, while Coherent is set to enhance its wafer production facility in Pennsylvania [1][2]. These strategic investments are part of a broader initiative that has already catalyzed 90 new projects across 28 U.S. states, with the potential to create more than 58,000 jobs in the semiconductor ecosystem [1][2].

Projected Growth and Global Impact

According to a recent SIA-Boston Consulting Group report, these initiatives are expected to drive unprecedented growth in U.S. semiconductor manufacturing capacity. The sector is projected to experience a 203% increase from 2022 to 2032, positioning the United States to capture approximately 28% of global capital expenditures from 2024 to 2032 [2][7]. As of January 2025, the Biden Administration has already distributed over 61 billion in combined grants and loans to 20 U.S.-based manufacturers [5].

Advanced R&D and Innovation Focus

The initiative’s commitment to innovation is evidenced by the recent establishment of new research facilities. A new CHIPS for America R&D facility in Arizona, announced on January 6, 2025, will focus on semiconductor prototyping and advanced packaging [8]. This facility, operated by the National Semiconductor Technology Center (NSTC) and the National Advanced Packaging Manufacturing Program (NAPMP), represents a critical step in maintaining U.S. technological leadership [8].

Economic and Strategic Implications

The SIA anticipates total investment in CHIPS Act projects to reach $380 billion over two decades, with most funds to be awarded by 2030 [5]. Industry experts emphasize the critical role of AI and machine learning in maximizing these investments, with the potential to improve on-time delivery rates by 30 to 50% [5]. John Neuffer, SIA President and CEO, has characterized these developments as ‘a big win for American supply chain security, manufacturing, and economic strength’ [1].

Bronnen

CHIPS Act analog devices