US to Provide Funding for Semiconductor Chips Awards to Boost Production

By Aarti Dhapte , 08 February, 2024

The semiconductor industry will experience immense growth in 2023 due to increasing sales of electric vehicles. The United States is preparing to increase semiconductor chip production by the end of 2024.

The United States Department of Commerce announces initiatives like semiconductor chips funding awards in 2023 to boost the growth of semiconductor chip production within the country. The department announced a dozen awards regarding semiconductor chips to aid the development of the semiconductor industry in 2023. The US Department of Commerce and BAE Systems Electronic Systems signed a memorandum to offer USD 35 million in federal incentives in support of 'Chips of America' for producing microelectronics centers. The project's primary aim is to replace the old tools and increase the production of semiconductor chips for the defense sector functionalities.

Based on a survey, semiconductor sales globally were expected to reach up to USD 100 billion in 2023 compared to USD 107.4 billion in 2022. Experts believed this transition was due to changing market scenarios in the semiconductor industry from 2022 to 2023. However, the survey reports give a tentative forecast of the manufacturing equipment growth in the semiconductor industry, expecting exponential growth in 2024 and reaching USD 124 billion by the end of 2025. The expert's insight into the semiconductor industry shows that 2024 will be a beneficial year for the semiconductor industry and aid in producing semiconductor chips. This is due to the increasing demand for equipment for specific geopolitical issues worldwide.

According to the US Department of Commerce, the funding awards are 5 to 15 percent of expenditures, and total awards will not exceed 35 percent of total project capital expenditures. The department adds that funding for the semiconductor chips awards will enhance the modernization of the United States Microelectronics Center. Since microelectronics play a vital role in the technological field, customers who deal with defense and likewise, this funding for the semiconductor industry is essential.