A few weeks ago, President Biden of the United States delivered a speech at IBM's headquarters in Poughkeepsie, New York, and promoted the passage of the Chip and Science Act worth 52 billion dollars. This is a rare legislation that the President wants to win the support of both parties.

According to SEMI, during Biden's visit to the factory on October 6, Arvind Krishna, the chairman and CEO of IBM, promised to invest $20 billion in the chip act for technology upgrading and job creation in New York State to "ensure the provision of reliable and secure next-generation chips for today's computer and AI platforms".

Two days before IBM announced the news, Micron Technology disclosed that it planned to invest 100 billion dollars in the field of chip manufacturing in the United States, including building a large wafer factory in the next 20 years to increase the production of cutting-edge memory chips in the United States. Before that, Intel had built a $20 billion semiconductor wafer factory outside Columbus, Ohio.

Obviously, the technology industry giants welcome the chip bill, because it will encourage them to invest in manufacturing, research and development, job creation and training in China through government financing and tax incentives. But how will the Chip Act benefit smaller industry ecosystem members? Or how will the bill support Fabless design startups, university research and development laboratories, and suppliers of chip equipment and materials? Does the Chip Act provide incentives for others? The answer is yes.

The US Department of Commerce recently released the grant and loan granting strategy, saying that it would particularly encourage small enterprises with low service levels to participate and support cooperation between large and small groups.

Although the Ministry of Commerce will not provide specific application guidelines until February 2023, the National Institute of Standards and Technology (NIST) recently released a Request for Information (RFI), which will help its Chip Program Office (CPO) "provide information for the design and implementation of chip incentive programs.".

In order to clarify this unclear process, the U.S. government is seeking feedback on how it should implement the Chip Act incentive plan and develop new research institutions to improve the U.S. leadership in semiconductor manufacturing. The consultation is required to be published before the end of the comment period on November 14, 2023.

According to BDO accounting firm, although it is not the time to apply for chip bill funding, it is expected that the application process will be very heavy, requiring the combination of financial, corporate and legal knowledge, as well as incentive agreements of state and local governments.

The company recently said: "Relevant companies should immediately start to collect key company and project information and communicate with state and local officials, because these funds will be very competitive."

On the surface, the Chip Act provides an important opportunity to consolidate and expand the semiconductor/microelectronic manufacturing industry in specific states and regions. For example, Oregon has become a leader in semiconductor innovation, design and manufacturing, and has 15% of the semiconductor workforce in the United States.

A semiconductor task force report released by the Oregon Commerce Commission said that Oregon "is catching up and establishing an in-depth and lasting industry university research officer (state and local) partnership, which is necessary for rapid action when opportunities such as the chip bill appear."

In short, the report suggests that Oregon may miss most of the funding for the chip bill unless many local factions can unite to form a united front as soon as possible. In addition, the report also pointed out that IBM and New York State are "the key model for Oregon to seek to develop chip related innovation ecosystem".

The experience and enlightenment of the New York model include the enduring commitment of the elected officials of the state, the direction and stability of the industry enterprises' "anchoring", and the transactions and decisions made "at the speed that the industry should have".

The Chip Act represents the largest investment of the U.S. government in the semiconductor/microelectronic manufacturing ecosystem. Oregon is far from the only state that can benefit from the Act. At the same time, companies of all sizes (not only industry giants) are critical to the long-term healthy development of the ecosystem.