$52 Billion Now Available for Semiconductor Suppliers

September 12th, 2022 5 min read

CHIPS Act funds new and expanded facilities, including robotic automation

The U.S. superconductor industry has slipped further and further behind other nations in recent years. The U.S. once made 40% of the world’s microchips, but that number has dropped to about 12% and represents nearly none of the most innovative products.

Spurred by shortages that have disrupted multiple industries and broader concerns about the U.S.’s role in global semiconductor manufacturing, Congress passed the CHIPS and Science Act on July 29. “CHIPS” stands for “Creating helpful incentives to produce semiconductors.

All told, the law provides $280 billion to make the U.S. more competitive in the chip manufacturing industry, which has become increasingly critical to the communications, automotive, healthcare, consumer electronics, and military sectors as well as overall economic growth and national security.

The bill distributes $52 billion over the next five years specifically to increase semiconductor manufacturing capabilities, as well as a 25% tax credit for both new and expanded facilities that manufacture semiconductors or equipment used in semiconductor manufacturing. It is vital assistance to a critical industry.

But it will also indirectly benefit a wide range of manufacturers who supply the semiconductor industry with everything from machined parts to plastic packaging. Specifically, the huge injection of capital should significantly increase demand for these products.

The question is, will suppliers struggling with a shortage of machine operators be able to capitalize on the moment? We believe robotic automation can help solve this issue and put manufacturers in a position to take full advantage of demand driven by the CHIPS Act.

A focused shot of a microchip being carefully placed on a printed circuit board.

How can suppliers benefit from the CHIPS Act?

Let’s take a quick look at the specifics of the bill. There are two sections that are particularly relevant for contract manufacturers who supply the semiconductor industry—or who are planning to get into this market. 

Section 101 explains that the CHIPS Act allocates $50 billion over five years that must be used to implement semiconductor incentive programs previously authorized under the National Defense Authorization Act (NDAA) for fiscal year 2021. Essentially, this means the funds can be used for “facilities and equipment in the United States for semiconductor fabrication, assembly, testing, advanced packaging, or research and development.” This includes financing the construction, expansion, or modernization of a facility or equipment.

In addition, Section 107 outlines the advanced manufacturing investment credit, a 25% tax credit for investments in semiconductor manufacturing or making the specialized tooling equipment required in these manufacturing processes. A report from the IEEE indicates that this tax credit should make building new manufacturing capacity in the U.S. much more comparable to building it offshore. In fact, many large semiconductor manufacturers have already outlined plans to build fabrication plants contingent on the passing of the bill.

Together, these incentives will almost certainly increase orders for all of the products that suppliers provide today. And the five-year timeline in the bill means those orders will be arriving sooner than later. But many suppliers already find it difficult to maintain current production levels, let alone accommodate a huge uptick in demand.

How robotic automation can help

This is where robotic automation may be able to lend a hand—or in this case, an arm. Robotic automation is capable of handling many of the tasks required in manufacturing operations, including:

• CNC machine tending

• General pick-and-place operations, including in clean-room environments

• Handling of caustic or sensitive materials

• Air cleaning and deionizing components

• Adhesive application on PCB boards

• Machine tending for packaging and labeling

This is not an exhaustive list, but it does represent applications where Rapid Machine Operators (RMOs) from Rapid Robotics are already being used today. These RMOs directly address the machine operator shortage, enabling manufacturers to very quickly deploy a robotic workforce to accomplish much more work with higher efficiency and smaller teams.

For manufacturers expecting a significant rise in demand driven by the CHIPS Act, adding RMOs now could provide a critical competitive advantage in winning that new business.

How to get started quickly

It should be acknowledged that previous iterations of robotic automation have fallen short in contract manufacturing environments. Traditional deployments were notorious for being very expensive, time-consuming, and plagued with integration issues when finally installed.

Rapid Robotics offers a much different approach, one that makes a great deal of sense for semiconductor industry suppliers seeking to ramp up production without needing to hire more difficult-to-hire machine operators.

The technology behind our robotic automation solution combines artificial intelligence (AI), advanced vision systems, a versatile articulated arm, and an intuitive user interface that does not require any programming or robotics expertise.

After an initial consultation, our experts  pre-program the RMO to perform the required tasks, allowing them to be up and running in less than one day after testing and training are complete. In fact, every RMO can be pre-trained on multiple tasks and moved between jobs without reprogramming, providing exceptional overall flexibility.

Of course, these RMOs can run 24x7 on an uninterrupted shift, and all maintenance, support, and updates are covered by the relatively low monthly subscription cost. The ROI can be extremely attractive, especially if the cost is covered by funds flowing from the CHIPS Act.

For more information on how Rapid Robotics can automate steps in your manufacturing process, go to rapidrobotics.com/contact-us for a free automation consultation.

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