The US semiconductor market is one step closer to receiving a major boost, with the US Senate on Tuesday (26th July) voting 64-32 to advance the $52bn CHIPS Act.

Hoping to place the US as a frontrunner in the semiconductor market, competing with the likes of China and Korea, the CHIPS Act sets aside funding for new semiconductor programmes, including $39bn for a grant programme available to semiconductor manufacturers as well as equipment and materials suppliers.

As gasworld heard last month an exclusive interview with Caroline Metcalf-Vera, Government Affairs at Electronic Fluorocarbons, the Act could also see the semiconductor supply chain benefit from $5bn of new capital. 

Additionally, a 25% tax credit is included for facilities that produce semiconductors or semiconductor manufacturing equipment.

Progress for the CHIPS Act comes as the US semiconductor is witnessing unprecedented demands and strained supply chains. According to the US Department of Commerce, demand for semiconductors in the US is as much as 17% higher in 2021 than it was in 2019.

Adding to the above strains, the majority of on-stream semiconductor manufacturing facilities are operating at or above 90% utilisation, meaning there is limited additional supply to bring online without building facilities.

Taking this into consideration, in addition to further headwinds being presented as a result of the Russia-Ukraine war, support for the vital market couldn’t come at a better time.

Read more: The impact on rare gases due to the Russian invasion of Ukraine

Tuesday’s vote has already been recognised as a very important milestone for the market. Welcoming news of the vote, John Neuffer, President and CEO of SIA, said, “Today’s bipartisan vote is a vital step toward enactment of legislation that will strengthen American chip production and innovation, economic growth and job creation, and national security.”

“We thank the bipartisan group of congressional champions for their leadership in advancing the CHIPS Act, applaud today’s Senate vote, and urge swift final passage in both the Senate and House. America has an historic opportunity to re-invigorate domestic chip manufacturing, design, and research, and Congress should seize it before it’s too late.”

Just last week (21st July), SEMI, the industry association serving the global electronics design and manufacturing supply chain, publicly applauded progress in the US Senate on the robust package of federal incentives for the semiconductor supply chain.

“…it is crucial for Congress to pass CHIPS funding and the investment tax credit.”

With the crucial need for support, SEMI also called for the Act to be swiftly pushed. 

Ajit Manocha, SEMI President and CEO, urged, “To strengthen the semiconductor supply chain in the US and keep pace with other regions offering incentives, it is crucial for Congress to pass CHIPS funding and the investment tax credit.”

“With semiconductor manufacturing facilities heavily reliant on a complex supply chain of equipment and materials providers, it is particularly important that these vital fab suppliers are eligible for incentives to ensure the resiliency, competitiveness and growth of the complete US semiconductor ecosystem.”

“SEMI also supports the addition of an advanced semiconductor research tax credit, extending the investment tax credit to materials suppliers, and other proposed reforms.”

semiconductor

Helium impact

Though the largest end-uses of helium include liquid helium for magnetic resonance imaging (MRI) manufacturing and service and gaseous helium for lifting applications (balloons, airships), helium demand for semiconductor production is expected to grow ~6% per year over the next three years from 2022 to 2024.

That’s according to analysis performed by TECHCET CA LLC, cited by Intelligas Consulting’s Maura D. Garvey in her exclusive 2022 worldwide helium market report for gasworld US Edition’s August issue (coming soon).

Helium demand for semiconductor continued to grow throughout the pandemic, and is heating up this year. Strong growth is also expected over the next several years, with plans for new fabs in the US and Europe. This has been emboldened through the aforementioned CHIPS Acts, and Garvey’s analysis notes that ‘We just need to have the helium supply to support this growth’.

That’s not the only question mark the Acts provide. According to Lita Shon-Roy, CEO of TECHCET CA LLC, “Once fully approved by Congress, the CHIPS Act will buoy up the market, allowing for further growth in the midst of recession worries. However, the question remains, ‘Will there be set asides in the CHIPS Act for materials production and R&D?’ This will be highly dependent on US policymakers and their interpretation of what is and is not needed to strengthen US’ position in semiconductor technology and manufacturing.”