Biden-Harris Administration Announces Preliminary Terms with GlobalWafers to Significantly Increase Production of Silicon Wafers in U.S.

Estimated reading time: 6 minutes

Today, as part of the Investing in America tour, the Biden-Harris Administration announced that the U.S. Department of Commerce and GlobalWafers America, LLC and MEMC LLC, subsidiaries of GlobalWafers Co., Ltd., have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $400 million in proposed direct funding under the CHIPS and Science Act to help onshore critical semiconductor wafer production and advance U.S. technology leadership. President Biden signed the bipartisan CHIPS and Science Act, a key component of his Investing in America agenda, to usher in a new era of semiconductor manufacturing in the United States, bringing with it a revitalized domestic supply chain, good-paying jobs, and investments in the industries of the future. The proposed CHIPS investment would support the construction of new wafer manufacturing facilities and the creation of 1,700 construction jobs and 880 manufacturing jobs. This proposed investment will support projects with total capital expenditures of approximately $4 billion across both states.

“President Biden is restoring our leadership in the entire semiconductor supply chain – from materials to manufacturing, to R&D. With this proposed investment, GlobalWafers will play a crucial role in bolstering America’s semiconductor supply chain by providing a domestic source of silicon wafers that are the backbone of advanced chips,” said U.S. Secretary of Commerce Gina Raimondo. “As a result of this proposed investment, the Biden-Harris Administration is helping to secure our supply chains, which will create over 2,000 jobs across Texas and Missouri and ultimately lowering costs and improving economic and national security for Americans.”

“President Biden is taking historic action to bring semiconductor manufacturing back in the United States,” said Arati Prabhakar, Assistant to the President for Science and Technology and Director of the White House Office of Science and Technology Policy. “The semiconductor wafers that will come from today’s announcement will be the foundation for the complex chips we need to compete in the global economy. We’re bolstering our national security, advancing our clean energy transition, and creating good jobs that support families in Texas and Missouri.”

Silicon wafers are critical components in the semiconductor ecosystem as they are a foundational input used in all chips. There are five leading companies, including GlobalWafers, that currently hold over 80% of the global 300mm silicon wafer manufacturing market and approximately 90% of silicon wafers are sourced from East Asia today. As a result of this proposed CHIPS investment, GlobalWafers would build and expand facilities in:

• Sherman, Texas: Establish the first 300mm silicon wafer manufacturing facility for advanced chips in the United States. Of note, 300mm silicon wafers are a key input used by foundries and integrated device manufacturers to manufacture leading-edge, mature-node, and memory chips.
• St. Peters, Missouri: Establish a new facility to produce 300mm silicon-on-insulator (“SOI”) wafers. Importantly, SOI wafers allow for significantly improved performance in harsh environments and are commonly used in defense and aerospace end uses.

Further, as part of the PMT, GlobalWafers plans to convert a portion of its existing silicon epitaxy wafer manufacturing facility in Sherman, Texas to silicon carbide (“SiC”) epitaxy wafer manufacturing, producing 150mm and 200mm SiC epitaxy wafers. SiC epitaxy wafers are a critical component for high-voltage applications, notably including electric vehicles and clean energy infrastructure.

Supporting the development of a local semiconductor workforce in Texas, GlobalWafers is a member of the Southern Methodist University-led Texoma Tech Hub and is involved in the North Texas Semiconductor Workforce Development Consortium led by the University of Texas Dallas. GlobalWafers is also part of an innovative partnership with Sherman High School, Denison High School, and Grayson College to establish an electronics lab at the schools that provide targeted training towards technician certifications required for new hires in the semiconductor industry. In St. Peters, MEMC is likewise developing an apprenticeship program for Maintenance Technicians with the National Institute for Industry and Career Advancement (NIICA) and local high schools. Further, MEMC is collaborating with St. Charles Community College on a program named MegaTech, which supports dual-enrolled high school students as they step into careers involving advanced manufacturing and automation.

As explained in its first Notice of Funding Opportunity, the Department may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After the PMT is signed, the Department begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant. The terms contained in any final award documents may differ from the terms of the PMT being announced today.

About CHIPS for America

CHIPS for America has announced up to $30.1 billion in proposed funding across thirteen preliminary memoranda of terms to revitalize America’s semiconductor industry. These proposed CHIPS for America investments are already delivering significant results, including unlocking more than $300 billion in public and private investment between now and the end of the decade – far and away the most investment in new production in the history of the U.S. semiconductor industry.

Earlier this year, Secretary Raimondo announced that we anticipate that America will produce 20% of the world’s leading-edge chips by the end of the decade, meaning our innovation capacity will no longer be as vulnerable to supply chain disruptions as it is today. The Semiconductor Industry Association released a report saying that America is on track to triple its domestic semiconductor manufacturing capacity from 2022 – when the CHIPS and Science Act was enacted – to 2032.

With these announcements, America now has four of the world’s five leading-edge companies making significant efforts to expand on our shores. No other economy in the world has more than two of these companies producing leading-edge chips on its shores.

The Department has received more than 670 statements of interest and more than 230 pre-applications and full applications for NOFO 1, and more than 160 small supplier concept plans for NOFO 2. The Department is continuing to conduct rigorous evaluation of applications to determine which projects will advance U.S. national and economic security, attract more private capital, and deliver other economic benefits to the country. The announcement with GlobalWafers is the thirteenth PMT announcement the Department of Commerce has made under the CHIPS and Science Act, with additional PMT announcements expected to follow throughout 2024.

CHIPS for America is part of President Biden’s economic plan to invest in America, stimulate private sector investment, create good-paying jobs, make more in the United States, and revitalize communities left behind. CHIPS for America includes the CHIPS Program Office, responsible for manufacturing incentives, and the CHIPS Research and Development Office, responsible for R&D programs, that both sit within the National Institute of Standards and Technology (NIST) at the Department of Commerce. NIST promotes U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. NIST is uniquely positioned to successfully administer the CHIPS for America program because of the bureau’s strong relationships with U.S. industries, its deep understanding of the semiconductor ecosystem, and its reputation as fair and trusted. Visit https://www.chips.gov to learn more.