Dive Brief:
- The Biden-Harris administration proposed three CHIPS and Science Act funding awards on Friday to Coherent, SkyWater Technology Foundry, and X-Fab, the Commerce Department announced.
- The funding will be used for three semiconductor facility expansions in Texas and Minnesota, according to the release.
- Both states have landed major CHIPS Act funding in the past — Minnesota has seen $139 million in investments and Texas has seen about $8.1 billion for four chip companies’ projects.
Dive Insight:
Coherent’s up to $33 million in CHIPS funding will modernize and expand its Sherman, Texas, facility, creating about 70 jobs. The expanded manufacturing cleanroom in Coherent’s existing 700,000-square-foot facility will install a 150mm indium phosphide manufacturing line by adding advanced wafer fabrication equipment to produce InP devices at scale.
InP optoelectronic devices are used in applications such as datacom and telecom transceivers, including for AI infrastructure, medical and automotive applications.
SkyWater Technology’s $16 million in CHIPS funding will be used to upgrade its Bloomington, Minnesota, facility, improving wafer production capacity by 30% and creating 70 jobs. The company is a Department of Defense Trusted Foundry supplier, a program for companies that assure integrity and confidentiality of integrated circuits down the supply chain.
In all, SkyWater plans to invest $320 million in customer-funded capital expenditures co-investments through 2026 to expand its capacity.
For the Bloomington facility’s workforce, SkyWater will keep its ongoing partnerships with Minnesota colleges in the area. A state fund also promises to provide $19 million in extra funding to support the project, according to the DOC release.
Finally, X-Fab will expand and upgrade its Lubbock, Texas, silicon carbide wafer foundry, which is crucial for automotive and renewable energy sectors. The $50 million CHIPS-funded project will create 150 jobs and address supply chain vulnerabilities, according to the release.
“The proposed CHIPS funding would bolster supply resiliency for critical infrastructure markets that were adversely impacted by foundry capacity shortages and supply chain disruptions during the COVID-19 pandemic,” the Department of Commerce press release stated regarding the X-Fab expansion.
The expansion, initially announced last year, will be worth $200 million and increase the facility’s capacity as it meets growing demand.
Belgium-based X-Fab operates five other wafer manufacturing sites in Germany, France and Malaysia, according to its website.
All three companies have said they plan to apply for the advanced manufacturing investment credit, which covers 25% of qualified capital expenditures.
Since December 2023, the CHIPS and Science Act has dished out $16.9 billion in proposed funding to 19 companies and finalized $16.3 billion in funding awards to eight chipmakers. The awards are rolling out with increasing speed as the country approaches the new presidential term in January, when President-elect Donald Trump takes office.
