Federal Support for Semiconductor Manufacturing
The U.S. Commerce Department announced on Wednesday a commitment of up to $18.2 million to Akash Systems to advance semiconductor manufacturing in West Oakland, California. This funding is part of the $52.7 billion semiconductor subsidy program aimed at revitalising chip manufacturing within the U.S. The subsidy will help Akash Systems, a California-based semiconductor company, construct a 40,000-square-foot cleanroom dedicated to advanced semiconductor production.
The grant will be combined with funding from Akash, venture capital firms, and private investors, amounting to a $121 million project to scale the production of Diamond Cooling substrates and related systems. This project aims to enhance semiconductor manufacturing with a focus on AI-driven data centres, benefiting high-performance computing and communication technologies.
Diamond Cooling Technology for Enhanced Thermal Management
Akash Systems uses its unique “Diamond Cooling” technology to improve thermal management for advanced data centres, addressing the increased heat generated by high-performance AI-driven applications. This innovation aligns with the U.S. goal to enhance the semiconductor supply chain and reduce dependence on foreign production.
Akash Systems CEO Felix Ejeckam stated, “As a U.S. company developing next-generation semiconductor technology, this validates our vision and strategy, helping us to deliver cutting-edge solutions that address thermal challenges in today’s high-performance computing and communication systems.” The project’s focus on sustainable thermal management could position Akash as a leader in the U.S. semiconductor industry.
Industry Labour Agreements and the CHIPS Act
In November 2023, Akash Systems and the IUE-CWA workers union announced labour agreements covering both construction and production workers. This includes a landmark labour neutrality agreement, the first of its kind for semiconductor production workers. This partnership aligns with the objectives of the CHIPS and Science Act, signed in 2022, which provides federal subsidies to encourage chipmakers to expand U.S. production.
Commerce Secretary Gina Raimondo praised the Akash award, noting that it ensures “the United States is a global leader in every part of the semiconductor supply chain.” The CHIPS Act funding has already seen preliminary agreements with around 20 companies, amounting to about $36 billion, as the U.S. seeks to attract semiconductor manufacturing back from Asia.
Polar Semiconductor and Future Chip Awards
To date, Polar Semiconductor is the only company with a finalized agreement, receiving $123 million to expand and modernize a chip fabrication facility in Bloomington, Minnesota. This agreement includes a five-year ban on stock buybacks and requires the company to share excess profits with the government as part of the funding conditions.
The Commerce Department is working to finalise further major awards before the new administration takes office. Companies such as Taiwan Semiconductor Manufacturing Co, GlobalFoundries, and at least one other chipmaker are reportedly set to receive awards, as the Biden administration accelerates efforts to secure the U.S. semiconductor supply chain.
With inputs from Reuters
