The US Department of Commerce (DOC) has unveiled a $1.4bn programme to accelerate the development of advanced packaging for semiconductors, part of its CHIPS for America initiative.
Under the CHIPS National Advanced Packaging Manufacturing Program, $300m will go to Absolics Inc., Applied Materials Inc. and Arizona State University for research into advanced substrates and materials.
“These investments are a key milestone as we build an ecosystem that supports modern semiconductor manufacturing in the United States,” said Secretary of Commerce Gina Raimondo in a statement.
The remaining $1.1bn will be used as direct funding for Natcast’s Advanced Packaging Facility in Tempe, Arizona. The award will support facilities that enable new semiconductor packaging methods to move from the lab to real-world production.
These sites will give researchers and companies space to test new materials, devices, and techniques using state-of-the-art technology—a vital step in bridging the gap between research and commercial manufacturing.
Industry leaders join long-term projects
The DOC also confirmed preliminary terms with major industry players, including Analog Devices and Coherent Corp., for projects aimed at advancing production capabilities.
Under the CHIPS Act, up to $105m in proposed direct funding will go to Analog Devices, Inc., up to $79m to Coherent, up to $10.3m to Intelligent Epitaxy Technology, Inc., and up to $52.1m to Sumika Semiconductor Materials Texas Inc.
What is semiconductor packaging and why is it important?
Semiconductor packaging is the process of enclosing tiny chips within a protective case so they can safely connect to electronic devices. This stage ensures the chip’s functionality, reliability and performance.
Advanced packaging techniques are becoming vital as chip designs grow smaller and more complex, enabling faster and more energy-efficient devices. Without proper packaging, these chips would be vulnerable to damage and would fail to deliver the high-performance standards modern technology demands.
“Thanks to the bipartisan CHIPS and Science Act, we are making targeted investments up and down the semiconductor supply chain to revitalise semiconductor manufacturing in the United States and advance US economic and national security,” said Raimondo.
A long-term partnership was also finalised with Natcast to operate the National Semiconductor Technology Centre (NSTC). Worth up to $6.3bn, the deal will act as an incentive to reduce the time and cost to prototype semiconductor technology.
Praising the ‘once-in-a-generation’ opportunity that the NSTC represents, Deirdre Hanford, CEO of Natcast, added, “We have already seen incredible engagement with the NSTC from across the semiconductor ecosystem, and momentum is growing. This significant investment from the Department of Commerce will help us further advance the strategic goals of the NSTC and strengthen our nation’s economic competitiveness and national security for decades to come.”
Expanding infrastructure
Meanwhile, CHIPS incentives awards have been allocated to companies like Corning (up to $32m), Edwards Vacuum (up to $18m), and Infinera (up to $93m) to expand domestic semiconductor production. These investments aim to create “tens of thousands of jobs in the US” while reducing reliance on foreign supply chains.
According to Corning Chairman and CEO Wendell Weeks, the investment goes a long way towards strengthening the domestic semiconductor supply chain.
“This […] will enable us to expand the next-generation manufacturing capabilities necessary for producing critical materials for lithography tools that create the world’s most advanced microchips,” he said.
The Department has also amended the previously announced award to provide a supplemental award of up to $75m in direct funding to GlobalFoundries.
This will support the expansion of the company’s Malta facility to become a fully integrated pureplay foundry wafer manufacturing and advanced packaging technology hub.
As the semiconductor industry remains crucial to countless sectors, including industrial gases, these initiatives are expected to ripple across related supply chains. Gas providers supporting semiconductor fabrication will likely see increased demand as these projects develop.
Helium, for instance, is crucial for cooling and maintaining inert environments during production. A report by IDTechEx projects that global helium demand could surpass 322 million cubic meters by 2035, nearly doubling due to the semiconductor sector’s expansion.
Overall, the global semiconductor gases market, which includes gases like nitrogen, hydrogen, and silane, was valued at $10.07bn in 2023 and is expected to reach $19.34bn by 2032, reflecting a compound annual growth rate of 7.5%.
Background: The CHIPS and Science Act
Enacted in 2022, the CHIPS and Science Act was designed to invest $30bn into research and development, manufacturing incentives, and workforce training for the semiconductor industry. Its ultimate goal is to enhance the competitiveness of the US in global semiconductor production while addressing vulnerabilities exposed during recent global supply shortages.
