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Specialty Chemicals

Biden’s CHIPS Act implementation plan is hit-and-miss for the chemical industry

Suppliers to chipmakers will be eligible for most incentives, but not investment tax credits

by Craig Bettenhausen
September 8, 2022 | A version of this story appeared in Volume 100, Issue 32

A stock image of a semiconductor wafer after patterning.
Credit: Shutterstock
Investment in semiconductor manufacturing is expected to spur demand for electronic materials.

The Biden administration has released a 20-page document outlining its plan for implementing the $50 billion CHIPS and Science Act of 2022 (H.R. 4346). The law, which President Biden signed on Aug. 9, funds grants, loans, and other incentives for semiconductor makers and their suppliers in hopes of putting the US chip industry back in a leadership position.

As an early indication the law might work, Micron announced on Sept. 1 that it would build a $15 billion memory chip plant next to its R&D center in Boise, Idaho.

Executives from the chemical and materials firms that supply the semiconductor industry lobbied hard to be included in the law’s subsidy package, Entegris CEO Bertrand Loy told C&EN in May.

The administration’s plan makes suppliers eligible for $39 billion in incentives for R&D and capacity expansions alongside semiconductor plants, or “fabs.” Those funds, plus $11 billion for federal R&D in measurement and characterization science, will be administered by the US Department of Commerce. “The United States no longer produces the world’s most advanced semiconductors,” the plan says, “and has lost the ability to produce key supply chain inputs such as lithography tools, substrates, and some specialty chemicals.”

However, the plan says Commerce expects most of the incentives—at least $28 billion—to go to construction or expansion of cutting-edge fabs. And only fabs and plants that make semiconductor manufacturing equipment are described as eligible for investment tax credits worth up to 25% of capital expenditures.

SEMI, an industry group representing suppliers to the semiconductor industry, says discussions about the tax credits are ongoing with officials in the US Treasury Department. “The entirety of the semiconductor value chain, including materials companies, is critical to the efforts to rebuild the domestic manufacturing,” says John Cooney, the organization’s vice president for global advocacy and public policy. “To truly bolster supply chain resilience, the total semiconductor manufacturing and design ecosystem in the US must be included.”

With or without investment tax credits, electronic chemical firms are moving forward with US capacity expansions. On Sept. 1, Sumitomo Chemical unveiled plans for a $130 million plant in Texas to make high-purity semiconductor process chemicals.



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