As the supply crisis for semiconductors continues, Taiwan-based company GlobalWafers Co. announced its plans to build a $5 billion factory just north of Dallas.
However, the investment is contingent on Congress passing the CHIPS For America Act, according to U.S. Commerce Secretary Gina Raimondo. “The [GlobalWafers] CEO told me that herself and they reiterated that today,” stated Raimondo.
Congress actually passed the CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act in January 2021 as part of the FY 2021 National Defense Authorization Act but has yet to fund the $52 billion measure. The CHIPS Act authorizes “a series of programs to promote the research, development, and fabrication of semiconductors within the United States.”
Raimondo says the measure must be funded before Congress goes into recess in August. “I don’t know how to say it any more plainly. [The GlobalWafers] deal…will go away, I think, if Congress doesn’t act,” Raimondo told CNBC.
If all goes as planned, the factory will be built in Sherman, Texas, a town of 44,000 people about 30 miles north of Dallas. As roughly 88% of semiconductor manufacturing is conducted outside of the United States, the GlobalWafers facility will be the largest of its kind in the U.S., Bloomberg reports.
The facility will be producing semiconductor wafers, which serve as the building blocks for more complex electronics. The wafers will be in the 300mm size, which has been adopted as the industry standard. Production is complicated, with the final product being a thin slice of crystalline silicon. GlobalWafers is experienced in the process, as it claims to be the third-largest producer of silicon wafers in the world.
Construction of the factory is expected to begin later this year, with the first wafers being produced in 2025. Production will slowly be ramped up until the facility reaches its goal of producing 1.2million wafers per month. GlobalWafers says that the factory will open up as many as 1,500 jobs for people in the area.
At one time, the U.S. produced 40% of all microprocessor chips manufactured in the world, but now that number has dwindled to 10% to 12%, according to Raimondo. “We stopped investing in chip manufacturing and chip R&D. And, in search of cheap labor, we watched a lot of our manufacturing leave our shores,” stated Raimondo.
The CHIPS Act, introduced by the Biden administration, offers incentives to move additional semiconductor production away from overseas markets and back home. The incentives, once funded, would be available to both foreign and domestic companies building or expanding chip manufacturing facilities.
Some companies, such as Taiwan Semiconductor Manufacturing Corp. and Intel, have put expansion plans on hold in the hope that the U.S. will allocate funding for the CHIPS Act.
Ensuring that Congress funds the bill is “my No. 1 priority,” Raimondo said.
