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White House touts $11 billion US semiconductor R&D program

FILE PHOTO: Illustration picture of semiconductor chips

By David Shepardson

WASHINGTON (Reuters) -The White House on Friday touted the U.S. government's plan to spend $11 billion on semiconductor-related research and development and said it was launching the $5 billion National Semiconductor Technology Center.

Congress in August 2022 approved the landmark Chips and Science Act. The law provides that $52.7 billion, including $39 billion in subsidies for semiconductor production and $11 billion research and development. It also creates a 25% investment tax credit for building chip plants, estimated to be worth $24 billion.

The centerpiece of the R&D program is the National Semiconductor Technology Center, which will conduct research and prototyping of advanced semiconductor technology.

The center is a "public private partnership that the government, industry customers, suppliers, academics, entrepreneurs, venture capitalists to come together to innovate, connect, network, solve problems and allow Americans to compete and out compete the world," U.S. Commerce Secretary Gina Raimondo said at a White House event.

Energy Secretary Jennifer Granholm said the effort was part of an "industrial strategy around chips" to preventing the loss of jobs overseas and add American jobs. "A nation that does not do R&D is a weak nation," Granholm said at the event. "We are not going to be weak anymore."

NSTC will establish an investment fund to help emerging semiconductor companies advance technologies toward commercialization.

The 2022 law also creates the National Advanced Packaging Manufacturing Program and new Manufacturing USA institutes focused on semiconductors.

Raimondo on Monday said Commerce plans to make several major awards to fund chip manufacturing within two months. "We're in the process of really complicated, challenging negotiations with these companies," Raimondo told Reuters in an interview. She did not identify the companies. In the "next six to eight weeks, you will see several more announcements. That's what we're striving for."

The semiconductor manufacturing program is intended to subsidize chip production and related supply chain investments. The awards will help build factories and increase production.

"These are highly complex, first-of-their-kind facilities" in the U.S., Raimondo said, noting that TSMC, Samsung, Intel, are among companies that have proposed them.

"These are new-generation investments -- size, scale complexity that's never been done before in this country," Raimondo said.

(Reporting by David Shepardson in Washington and Anirudh Saligrama in Bengaluru; Editing by David Gregorio)