Commerce Secretary Raimondo: U.S. set to become a major hub of leading-edge logic chip manufacturing

[Daniel Nenni]

KEY POINTS

- U.S. Secretary of Commerce Gina Raimondo said CHIPS and Science Act investments will put the U.S. on track to manufacture roughly 20% of leading-edge logic chips by the end of the decade.

• - Today, U.S. fabricators make 0% of these chips, Raimondo said.
• 
  
• - Leading-edge logic chips are used in emerging technologies such as artificial intelligence.

U.S. Secretary of Commerce Gina Raimondo testifies during the House Science, Space and Technology Committee hearing titled “Chips on the Table: A one year review of the CHIPS and Science Act,” in the Rayburn Building in Washington, D.C., on Sept. 19, 2023.

• U.S. Secretary of Commerce Gina Raimondo said CHIPS and Science Act investments will put the U.S. on track to manufacture roughly 20% of leading-edge logic chips by the end of the decade. Today, U.S. fabricators make 0% of these chips, Raimondo said. Leading-edge logic chips are used in emerging technologies such as artificial intelligence.

WASHINGTON — The Biden administration is aiming to make the U.S. a major manufacturer of state-of-the-art semiconductor chips before 2030 to compete on the global market, increase national security and create more jobs, Commerce Secretary Gina Raimondo said Monday.

“Our investments in leading-edge logic chip manufacturing will put this country on track to produce roughly 20% of the world’s leading-edge logic chips by the end of the decade,” Raimondo said during a speech at the Center for Strategic and International Studies.

“That’s a big deal,” she added. “Why is that a big deal? Because folks, today we’re at zero.”

The announcement comes a year after the U.S. Department of Commerce opened funding applications for the 2022 CHIPS and Science Act, including $39 billion in manufacturing incentives, and Raimondo outlined its goals by 2030. Among them were the design and production of the world’s most advanced chips in at least two new fabrication plant clusters built for the purpose.

The plan will result in “hundreds of thousands of good-paying jobs,” Raimondo said Monday.
Leading-edge logic semiconductor chips are used in advanced technologies such as artificial intelligence, quantum computing and machine learning, according to McKinsey & Company, a global management consulting firm.

“When we started this, generative AI wasn’t even really part of our vocabulary,” Raimondo said.

“Now it’s everywhere,” she said. “It takes tens of thousands of leading-edge semiconductor chips to train a single large language model.”

Chips with node sizes of 14 nanometers and below are considered leading-edge, according to McKinsey. Nanometers refer to the size of an individual transistor on a chip, and smaller transistors mean more can be packed onto a chip, meaning a reduction in nanometer size can result in a more powerful and efficient semiconductor.

The Taiwan Semiconductor Manufacturing Company, which manufactures chips for companies such as Apple and Nvidia, is currently the world’s largest, most advanced contract chip maker.

But China is “taking an increasingly ambitious role in increasing their own chip production,” Raimondo said.

Chinese chipmaker Semiconductor Manufacturing International Corporation appears to have defied U.S. sanctions in recent months by manufacturing advanced chips and is preparing to produce five nanometer chips for technology corporation Huawei.

The U.S. took steps last October to prevent U.S. chip manufacturers from selling advanced chips to China, and SMIC has been on the Commerce Department’s blacklist since 2020.

National security concerns are partly why Commerce will deny funding to a significant portion of the more than 600 statements of interest from companies that want in on the CHIPS Act, Raimondo said.

“Our job is to make targeted investments in relentless pursuit of achieving our national security objectives,” she said.

“At the outset, we said we would invest about $28 billion of the program’s $39 billion in incentives for leading-edge chip manufacturing,” Raimondo added. “Even though that sounds like a lot of money, the leading-edge companies alone have requested more than $70 billion.“

Commerce Secretary Raimondo: U.S. set to become a major hub of leading-edge logic chip manufacturing

Leading-edge logic semiconductor chips are crucial in making the U.S. competitive in artificial intelligence, Commerce Secretary Raimondo said.

www.cnbc.com

 

[blueone]

Such nonsense. The subsidies are too small to achieve the success promised, the Act wastes too much money on the useless NSTC, and there are too many political strings attached to the small amount of subsidies compared to the scale of the problems. Congress and the Biden Administration can't even reduce permitting inefficiencies, which has a solution that is just the stroke of a pen that costs nothing.

 

[MKWVentures]

Such nonsense. The subsidies are too small to achieve the success promised, the Act wastes too much money on the useless NSTC, and there are too many political strings attached to the small amount of subsidies compared to the scale of the problems. Congress and the Biden Administration can't even reduce permitting inefficiencies, which has solution that is just the stroke of a pen that costs nothing.

The Chips act money will have tons of waste, government organizations, and people scheduling taskforces to plan committees to organize timelines.... but the ITC is real and it is making a difference. We published a blog on this and have some examples that will show up in 2024 financial statements

 

[Daniel Nenni]

• "U.S. Secretary of Commerce Gina Raimondo said CHIPS and Science Act investments will put the U.S. on track to manufacture roughly 20% of leading-edge logic chips by the end of the decade. Today, U.S. fabricators make 0% of these chips, Raimondo said. Leading-edge logic chips are used in emerging technologies such as artificial intelligence."

"Chips with node sizes of 14 nanometers and below are considered leading-edge, according to McKinsey. Nanometers refer to the size of an individual transistor on a chip, and smaller transistors mean more can be packed onto a chip, meaning a reduction in nanometer size can result in a more powerful and efficient semiconductor."

Seriously, how long have Intel, Globalfoundries, and Samsung been manufacturing 14nm in the US? Intel is now manufacturing 7nm and 4nm in the US? And TSMC started the AZ build before the CHIPS Act. They need to get their stories straight.

 

[TBiggs]

What is the point of 20%?

Is 20% enough to supply or enable some critical US defense need.

Does 20% if you all assume at Intel somehow provide enough scale and volume to hedge PLA and Xi.

I admire what Pat and Intel is looking to try and do. IMO I don’t think Intel will be a player for Apple, Nvidia, Qualcomm, AMD, Broadcom, Microsoft, Google etc. and so many other TSMC customers at the N node.

If the Az TSMC fab goes to production in 2025 it will N-2 hardly leading edge and even the Samsung fab if you believe they are real N will be N-2 at best too. Even with these sites up all the TI still likely go thru Asia so little real strategic protection if Xi goes Putin.

This whole thing seems like Ostrich with head stuck in the sand. Who advises these Washington strategy and policy clowns?

I believe TSMC already said leading edge will remain in Taiwan. The only way US retains some strategic leverage for leading edge is with Intel and its drive to become a real technology and foundry leader. Will Intel become Lockheed Martin+ as the future ?

I assume Secretary Raimondo is basing her forecast on assumption US is on track for 20% based on the most optimistic forecast for Intel becoming #2 Foundry and Ohio site becomes real.

 

[Daniel Nenni]

It doesn't matter what % is made in the US. If Taiwan or South Korea is attacked it will be a scorched earth thing and the semiconductor industry will implode. It really could be the start of WWIII. China knows that. Russia knows that. North Korea depends on China and Russia so by proxy they know that.

We went through the same thing with nuclear warheads. Scorched earth. It isn't going to happen. AI is a much bigger threat than fabs being bombed, my opinion.

TSMC will manufacture leading edge nodes in the US and Japan. AZ will be N5 and N3.

 

[blueone]

What is the point of 20%?

Is 20% enough to supply or enable some critical US defense need.

Does 20% if you all assume at Intel somehow provide enough scale and volume to hedge PLA and Xi.

20% is actually the stretch goal. There's no justification I've ever seen that 20% is the result of rigorous analysis as being a critical US manufacturing share. Also, as has been brought up by several people, if TSMC still does process development in Taiwan the US-based fab solution is a short-term one.

I admire what Pat and Intel is looking to try and do. IMO I don’t think Intel will be a player for Apple, Nvidia, Qualcomm, AMD, Broadcom, Microsoft, Google etc. and so many other TSMC customers at the N node.

If the Az TSMC fab goes to production in 2025 it will N-2 hardly leading edge and even the Samsung fab if you believe they are real N will be N-2 at best too. Even with these sites up all the TI still likely go thru Asia so little real strategic protection if Xi goes Putin.

This whole thing seems like Ostrich with head stuck in the sand. Who advises these Washington strategy and policy clowns?

I don't think the POR is the result of expert advice. It is a balancing act between what's deemed necessary for national security, and the support of the Democratic Progressives, who are largely socialists, and blame many of their policy inadequacies on corporate greed. Japan appears to be the role model for doing what's necessary.

 

[TBiggs]

It doesn't matter what % is made in the US. If Taiwan or South Korea is attacked it will be a scorched earth thing and the semiconductor industry will implode. It really could be the start of WWIII. China knows that. Russia knows that. North Korea depends on China and Russia so by proxy they know that.

We went through the same thing with nuclear warheads. Scorched earth. It isn't going to happen. AI is a much bigger threat than fabs being bombed, my opinion.

TSMC will manufacture leading edge nodes in the US and Japan. AZ will be N5 and N3.

Well if we keep denying China everything from chips, to tools to advanced node access be careful of what their response may be. A very dangerous game of poker.

N4 will be N-2 by 2025 and the time N3 comes if it ever does will be similar. It is almost the relevancy of N7 today. Yes it will be technically advanced but not leading edge.

I agree the US is so overt at denying China the equipment and ability to compete on equal footing with the west I can see we have pushed them far enough that they could see it justified already to launch some subversive response. They don’t need AI for that. But this overt approach to denying China everything isn’t without a huge blowback that is really yet to happen.

In a perverse way maybe it will be China’s huge lead in batteries, EV, solar and manufacturing of everything electronic that they are really in a position of far more leverage than we know.

 

[cliff]

Gina, you are correct. 14nm is an advanced process. A double patterned process that uses FinFETs (low leakage) with 13 copper routing layers, routable contacts, and diffusion cuts would certainly satisfy most of US needs, even for the DoD.

 

[hskuo]

Gina, you are correct. 14nm is an advanced process. A double patterned process that uses FinFETs (low leakage) with 13 copper routing layers, routable contacts, and diffusion cuts would certainly satisfy most of US needs, even for the DoD.

Wow, if it is true, then there will be no new iPhone or autonomous drive cars needed in US.

 

[TBiggs]

Gina, you are correct. 14nm is an advanced process. A double patterned process that uses FinFETs (low leakage) with 13 copper routing layers, routable contacts, and diffusion cuts would certainly satisfy most of US needs, even for the DoD.

Wow why did we do the CHIPS act Intel 10nm was a generation ahead of what we needed. Darn no EUV either let them commies waste their money on EUV and advanced technology the US secure and Intel 14 and 10nm is all good, LOL

 

[cliff]

What process is NXP using?

Why is Japan building 28-12nm?

 

[coldsolder215]

The same speech she said companies have to make do with half of what they requested, turns out it's much easier to launder money through the defense industry via Ukraine and Israel than it is to stimulate industrial development on the de-industrialized home front. These people live in their own bubble and can define reality however they see fit. They say something, the media then praises whatever they say, then they read it in the papers the next morning and pat themselves on the back.

 

[TBiggs]

What process is NXP using?

Why is Japan building 28-12nm?

why 28-12 do tell! IMO that is the sweet spot for current demand and willingness of technology sharing.

Is there really a demand, I think when they come online there could be overcapacity as a ton of 7 and 5 being freed up as HPC and Mobile are moving to 3nm and 2 shortly.

 

[TBiggs]

The same speech she said companies have to make do with half of what they requested, turns out it's much easier to launder money through the defense industry via Ukraine and Israel than it is to stimulate industrial development on the de-industrialized home front. These people live in their own bubble and can define reality however they see fit. They say something, the media then praises whatever they say, then they read it in the papers the next morning and pat themselves on the back.

I wonder if they tell the Navy, Air force and Army the same thing with their mult-billion procurement wants, oops they do that too.

There ain’t enough gravy for all the pigs at the trough; defense, infrastructure, SS, etc etc etc.

 

[Arthur Hanson]

Education and training worldwide need to be revised for the age of AI/ML which is upon us and advancing at a fast clip. Learning how to configure, set up and apply AI/ML will be the skill set used by the vast majority, with a smaller number the keep advancing AI/ML itself.

 

[coldsolder215]

I wonder if they tell the Navy, Air force and Army the same thing with their mult-billion procurement wants, oops they do that too.

There ain’t enough gravy for all the pigs at the trough; defense, infrastructure, SS, etc etc etc.

Those guys get almost $1T a year, CHIPS is $53B over several years. We are piglets compared to those feral hogs.

 

[Daniel Nenni]

Those guys get almost $1T a year, CHIPS is $53B over several years. We are piglets compared to those feral hogs.

CHIPs Act is over 10 years so it is like hitting the lottery with no early payout. GF gets $150m over 10 years.

 

[blueone]

Those guys get almost $1T a year, CHIPS is $53B over several years. We are piglets compared to those feral hogs.

Actually, the largest current expenditure in the US federal budget is interest on the national debt. The interest payout will cross $1T this year. The defense budget for FY2025 is less than $900B. Of that $900B, about 25% goes to personnel costs, according to the Congressional Budget Office. For that $900B we get arguably the defense of the entire (so-called) free world. The CHIPS Act on the other hand, the way it's defined and being implemented, is IMO a $53B waste of money. For $53B we could have 12 new Virginia-class nuclear submarines, which looks like a better deal to me.

 

[TBiggs]

Actually, the largest current expenditure in the US federal budget is interest on the national debt. The interest payout will cross $1T this year. The defense budget for FY2025 is less than $900B. Of that $900B, about 25% goes to personnel costs, according to the Congressional Budget Office. For that $900B we get arguably the defense of the entire (so-called) free world. The CHIPS Act on the other hand, the way it's defined and being implemented, is IMO a $53B waste of money. For $53B we could have 12 new Virginia-class nuclear submarines, which looks like a better deal to me.

52 Billion can with more certainty by a battle group to park in the East China Sea. The days Virginia vs Battle Group would make for what our strategy is, broken next LOL.

IMHO the current narrative of making China big and bad is western driven. They need bad enemies to rally the country, China and Russia too. US can’t accept an equal or rising equal, especially one that has a different ideology.

China has shown great restraint. Imagine what China could have done after the US shut down HiSilicon and Huawei and than all the tech embargo. It was an economic castration of China. Imagine if Taiwan, OPEC or others did this to the US what would the US do.

US bullies because it still can, I can see why other ideologies are hell bent to match or be independent