On January 24, 2022, the US Department of Commerce (“Commerce”) issued a request for information (“RFI”) to gather input on incentivizing domestic semiconductor investments and accelerate chip research to “ensure a robust domestic semiconductor industry.” Comments must be received by 5:00 p.m. Eastern time on March 25, 2022.
Specifically, with the assistance of the National Institute of Standards and Technology (“NIST”), Commerce is requesting information to inform the design and implementation of the potential programs set out in the National Defense Authorization Act (“NDAA”) for Fiscal Year 2021. As explained in the RFI, these programs are intended to restore US leadership in semiconductor manufacturing by providing incentives and encouraging investment to expand manufacturing capacity. Among many items outlined in the RFI, Commerce is seeking input on potential use of alternative materials for production to mitigate impact of supply chain disruptions and how proposed programs can support supple chain development.
As Commerce moves forward with new initiatives and regulations, these efforts may result in both carrots (i.e., incentives, which are the focus of the latest RFI) and sticks (i.e., new regulatory requirements). Companies involved in semiconductor supply chains should review the RFI and consider taking the opportunity to provide input to Commerce. This includes not only companies in the semiconductor industry but also companies that use semiconductors in their products, which captures a wide range of products across virtually every industry.
The RFI was issued the day before Commerce published the results of responses to a previous RFI on the risks within the semiconductor supply chain issued in September 2021. Some of the key findings include a sharp increase in demand for semiconductors within the last few years, a finding that a majority of manufacturing facilities are already operating near full utilization, reports that bottlenecks are concentrated within specific semiconductor inputs, and a lack of raw materials for production. Commerce also issued a press release and a blog post on the September 2021 RFI findings. In short, Commerce’s position is that the United States “needs to produce more semiconductors” to contribute to a more resilient semiconductor supply chain in the future. We can expect to see more government initiatives in support of that goal.
We have been reporting on the various US (and other) government efforts related to semiconductor supply chains on this blog. For previous posts on this topic, see here.
The author thanks Ryan Orange for his contribution to this blog post.