What the US CHIPS Act left out

Facebook X LinkedIn Email

After lingering for two years in legislative gridlock, the CHIPS and Science Act of 2022 was finally passed by both the Senate and the House of Representatives in July. President Biden quickly signed it into law, and early last month the Department of Commerce published its strategy for implementing the $52 billion that the bill designated to restore momentum to the nation’s domestic semiconductor industry.

The U.S. now has a plan, rather than a plan to have a plan.

The new legislation’s four goals are to expand chip production capacity in the U.S., stabilize the nation’s supply of the most advanced chips, fuel research and development to gain and sustain technical advantage, and build a qualified domestic semiconductor manufacturing workforce.

The strategy document largely defines how the Department of Commerce will disburse the act’s $52 billion largesse, and where. Roughly $40 billion of the pot will go toward incentivizing investment in new semiconductor technology, production equipment, and infrastructure — all within U.S. borders, though the legislation shrewdly accepts investment in domestic infrastructure from key foreign players, such as Taiwan Semiconductor Manufacturing Company (TSMC). The remaining funds in the bill will establish up to three technology institutes to promote advanced research and commercialization of semiconductor manufacturing technologies.

Notably, the U.S. legislation has an analog in the European Union, which proposed its own Chips Act in February. The EU’s proposal earmarked €43 billion ($43 billion), of which €11 billion would go to pilot facilities, while the remaining funds would subsidize investment in manufacturing infrastructure.

Any windfall for the semiconductor industry is, by association, a windfall for the optics and photonics industry, which provides critical tools with which to fabricate and test integrated circuits (ICs). Obviously, any government-fueled investment in such an established photonics sector is welcome. The question remains, however, whether the U.S. or EU initiatives might extend to our industry’s fastest emerging sector: photonic ICs (PICs).

The language of the U.S. bill and the surrounding government commentary — and the subsidization of TSMC’s planned Arizona fab — all underscore that the bill’s key strategic aims revolve around the most advanced semiconductor technology nodes, defined by electronic chips incorporating features smaller than 10 nm.

Arguably, future-proofing any national strategy for semiconductor sovereignty must look past strictly electronic chips to also support development of PIC devices by, at the very least, increasing coordination of research and design efforts. Further, investment in PIC versus IC fabs might even generate higher returns, since PIC chipsets can be fabricated with comparatively well-established and mature processes.

Historically, major government investments such as the U.S. CHIPS and Science Act ripple through technology sectors in unexpectedly beneficial ways, and it is reasonable to assume the recent legislation will help advance the nation’s emerging PIC sector indirectly. Let’s hope, however, that future initiatives in support of our domestic semiconductor industry will assign this vital new sector the importance it deserves.

A PDF copy of the Department of Commerce’s CHIPS for America fund strategy is available at

Published: October 2022

We use cookies to improve user experience and analyze our website traffic as stated in our Privacy Policy. By using this website, you agree to the use of cookies unless you have disabled them.