Federal funding boosts US chip packaging with $1.4B in CHIPS Act awards

Forward-looking: The Department of Commerce has announced $1.4 billion in awards through the CHIPS National Advanced Packaging Manufacturing Program. While this initiative will contribute to making faster phones and laptops (thanks to the performance gains enabled by advanced packaging), it aims for much more. The primary goal is to establish American leadership in the complex process of assembling cutting-edge chips and to lay the foundation for next-generation computing applications, including AI, high-performance data centers, and beyond.

The awards target two key areas: advanced substrates and materials research, and a brand-new facility for piloting and prototyping advanced packaging techniques at scale.

In the materials category, $100 million each is being awarded to Absolics, Applied Materials, and Arizona State University. These projects aim to drive breakthroughs in areas such as glass and silicon-core substrates that enhance power efficiency. ASU is undertaking particularly innovative work to scale up wafer-level and panel-level packaging – capabilities that currently do not exist for large-scale manufacturing in the US.

The largest portion of the funding, $1.1 billion, is being awarded to Natcast to oversee the packaging capabilities at the new CHIPS for America Prototyping and NAPMP Advanced Packaging Piloting Facility in Tempe, Arizona.

This facility, first announced last year, is designed to bridge the gap between early-stage research and full-scale commercial production of cutting-edge packaging techniques. It will feature a baseline advanced packaging pilot line where companies and researchers can test and refine new processes before scaling them up for high-volume manufacturing.

According to the Department of Commerce, the ultimate goal is to establish “a self-sustaining, high-volume, domestic, advanced packaging industry where advanced-node chips are both manufactured and packaged in the United States.”

This would mark a significant shift. For years, semiconductor packaging has primarily occurred overseas, even for chips designed and fabricated in the US. Bringing more of that capability back stateside is seen as a national priority.

While the $1.4 billion in NAPMP funding represents a substantial federal investment, it is intended to catalyze significantly more private-sector spending in the years ahead. This funding is just one component of the $52 billion CHIPS and Science Act passed in 2022, which also allocates billions more for semiconductor manufacturing, research and development, and workforce training.