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Federal agencies make moves on CHIPS Act funding

Agencies across the federal government are responsible for doling out CHIPS Act funding over the next several years to support tech innovation and workforce development.

In the year since the CHIPS and Science Act of 2022 passed, beneficiaries of the massive $280 billion package have been busy planning for funding that will be doled out over the next several years to boost U.S. semiconductor manufacturing, technology innovation and workforce development.

Semiconductor manufacturing remains a significant focus of the package, with the U.S. Department of Commerce processing 460 statements of interest from chip manufacturers as of Aug. 9 to build new facilities in the U.S. These firms are competing for $39 billion out of the total CHIPS spending package.

Most of the funding, roughly $230 billion, goes to organizations like the Department of Energy, National Institute of Standards and Technology, and the National Science Foundation (NSF) to support research and workforce development. NSF is one of the largest recipients of research and innovation funding, with a planned $81 billion -- or nearly 29% -- during the next five years.

Efforts to get funding from the CHIPS Act have been slowly under way -- something Forrester analyst Glenn O'Donnell said should be expected from legislation with a price tag in the billions.

"The bill needs an entire bureaucracy to manage that, to give it oversight and put in place all kinds of policies and regulations to make sure it's being done properly and nobody's ripping it off," he said.

Though funding in the CHIPS Act will take many years to roll out, agencies like NSF are already working to address U.S. concerns that the legislation focuses on, including tech innovation and workforce competitiveness.

Regional technology innovation programs get moving

NSF's annual budget grew from $8.8 billion to $9.9 billion from fiscal year 2022 to 2023. NSF's Directorate for Technology, Innovation and Partnerships (TIP) and Directorate for STEM Education received a one-time emergency supplemental funding amount of $335 million from the CHIPS Act.

The $81 billion authorized by the CHIPS Act marks a significant increase in NSF's annual budget from fiscal year 2023 to 2027. Should the funds be appropriated during the annual budget cycle, it would double the agency's current budget.

TIP is using allotted funding to get tech innovation efforts requested in the CHIPS Act moving.

In May, TIP invested $43 million in 44 awards across 46 states and territories across the U.S. for the NSF Regional Innovation Engines program -- an effort authorized by the CHIPS Act.

The program aims to develop regional innovation clusters similar to Silicon Valley, with a focus on regions historically underserved by NSF or the federal government, said Erwin Gianchandani, TIP assistant director. Each of the 44 awards equates to $1 million for initial plan development for awardees considered type 1 of the engines program. As the awardees develop the right partnerships and vision to boost technology innovation and workforce development, they could be awarded up to $160 million over 10 years, which is considered type 2 of the engines program.

"One of the things we're excited about in this portfolio is we've tried to broaden the tent and go beyond your traditional university powerhouses," he said. "We're trying to engage industry, state, local and tribal governments, nonprofits and so forth." He said that of the 44 projects it funded, almost a quarter are led by organizations new to NSF.

The University of Nevada, Reno is one such recipient. The university's project focuses on growing the workforce, technology and supply chain to support lithium mining, processing and recycling. Nevada is home to the only lithium mine in the U.S. Lithium is used in batteries for electric vehicles.

"That's an example of a project that touches key technologies, materials and manufacturing," Gianchandani said. "It also has national, societal and geostrategic implications for the U.S."

Some more developed regions are considered type 2 in the engines program, meaning they're already prepared to manage the larger individual award of $160 million over 10 years. TIP has announced 16 finalists for the full award and will be conducting site visits over the next six to eight weeks, with plans to announce final awards in December.

TIP has also partnered with companies like Intel, Samsung, Ericsson and IBM around research and development efforts for future semiconductors and microelectronics.

Federal agencies focus on workforce

Workforce concerns are increasing, as manufacturers claim a lack of workers to man future chip facilities in the U.S.

A Semiconductor Industry Association and Oxford Economics study found that the U.S. faces a shortage of technicians, computer scientists and engineers, projecting a shortfall of 67,000 workers in the semiconductor industry and a gap of 1.4 million workers in these areas in the broader U.S. economy by 2030.

The bigger problem the industry has is people are not knocking on your door wanting to work in these environments.
Frank DzubeckPresident, Communications Network Architects

Finding and training personnel in the semiconductor industry will not be an easy process.

"You must have a skilled workforce capable of maintaining all of the responsibilities associated with a cleanroom environment," said Frank Dzubeck, president of Communications Network Architects. "This is not like working on an assembly line for making cars or airplanes. But the bigger problem the industry has is people are not knocking on your door wanting to work in these environments."

It's not a concern that's gone unnoticed by Congress, which set $200 million aside in the CHIPS Act for developing the semiconductor manufacturing workforce alone.

Federal agencies will use monies they receive from the CHIPS Act to find and train people with little or no experience in the semiconductor industry. About $2 billion of the CHIPS Act funding is going to the Department of Defense for DOD applications, semiconductor development and workforce training at U.S. universities. The Department of Commerce and the National Institute of Standards and Technology will be working with about $21 billion for developing manufacturing institutes, building technology hubs and expanding research and development efforts.

At NSF over the last year, TIP and the STEM education directorate launched a $30 million program called Experiential Learning for Emerging and Novel Technologies. The goal is to support not just students, but also anyone in education or the workforce interested in learning what's it like to work in a chip manufacturing facility or on technology like artificial intelligence.

Gianchandani said the plan is to grant awards by the end of the year to universities, companies or others to stimulate interest in education or certifications in technical areas.

"How do we essentially create regional consortia where you're bringing together companies and local, state and tribal governments, and others with a specific focus on the internships, externships, apprenticeships we want to make available to the talent in this region," he said.

TIP's partnerships with industry companies Intel and Micron Technology also aim to boost workforce development. Gianchandani said the objective is to bring the latest information on chips and manufacturing into classrooms, providing experiential opportunities, and improving teacher professional development.

Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.

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