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.Tom Williams | Cq-roll Call, Inc. | Getty Images

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

by · CNBC

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.

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."

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