According to the latest statement from the U.S. Department of Commerce, the Biden administration said on Tuesday local time that it will allocate up to US$1.6 billion to develop new computer chip packaging technologies, which is an important step in the United States' efforts to stay ahead of China in manufacturing components needed for applications such as artificial intelligence (AI).

Laurie E. Locascio, U.S. Deputy Secretary of Commerce and Director of the National Institute of Standards and Technology (NIST), said the proposed funding for the National Advanced Packaging Manufacturing Initiative is part of the $52 billion authorized in the 2022 Chips and Science Act, with a focus on supporting companies to innovate in new chip packaging technologies.

As is known in the industry, packaging is an important part of the chip industry. The United States is highly dependent on Asia in the semiconductor packaging process. It is understood that chip packaging is mainly carried out in mainland China and Taiwan, Malaysia, South Korea, the Philippines, Vietnam and other places.

IPC cited data from the US Department of Defense and estimated that the United States only accounts for about 3% of the advanced chip packaging market share. Long-term packaging dependence on Asia has limited the development space of the US semiconductor industry and also posed a potential threat to national economic security.

In order to change this situation, the Biden administration proposed the "National Advanced Packaging Manufacturing Program" (NAPMP), which aims to establish leading domestic semiconductor advanced packaging capabilities through large-scale investment in research and development. The program will attract extensive participation from industry and academia to jointly promote the innovation and application of advanced packaging technology.

According to the plan of the US Department of Commerce, the "National Advanced Packaging Manufacturing Program" will invest up to $1.6 billion in innovation funds in five R&D areas. It is expected that each company that meets the R&D project subsidy application can obtain a total subsidy of up to $150 million.

The five R&D areas covered by the National Advanced Packaging Manufacturing Program are:

Equipment, tools, processes and process integration;

• Power delivery and thermal management;

• Connector technology, including photonics and radio frequency (RF);

• Chiplet ecosystem;

• Co-design/electronic design automation (EDA).

In addition to the R&D areas, funding opportunities are expected to include opportunities for prototype development.

It's a well-known fact that much of the U.S. federal government's subsidy money goes to the early stages of manufacturing, because chips produced in new U.S. factories are likely to be shipped to Asia for packaging, which does little to reduce dependence on foreign companies.

In recent years, with the rapid development of emerging technologies such as artificial intelligence and big data, the performance requirements for semiconductor chips have become increasingly higher. Advanced packaging technology is a key link in improving chip performance. By placing multiple chips side by side or stacked together, advanced packaging technology can significantly improve computing performance, reduce power consumption, and meet growing computing needs.

Today, many companies including Intel, SK Hynix, Amkor and Samsung Electronics are investing in and building packaging plants in the United States.

It is worth mentioning that Tokyo-based Showa Denko (Resonac) announced on Monday that it will establish the US-JOINT semiconductor packaging alliance with nine other Japanese companies. The organizations will join together to jointly invest in an alliance activity base in California, where cleanroom construction and equipment installation will begin this year, with the goal of starting operations in 2025.

U.S. Secretary of Commerce Gina Raimondo said: "President Biden has made it clear that we need to build a vibrant domestic semiconductor ecosystem in the United States, and advanced packaging is an important part of that. Now, as the Biden Administration is committed to investing in the United States, America will have a wide range of advanced packaging options and breakthroughs in new packaging technologies across the country. This announcement is just the latest example of our commitment to investing in cutting-edge research and development, which is essential to creating high-quality jobs in the United States and making our country a leading nation. Leaders in semiconductor manufacturing are critical.”

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