The US outlines strategy to bolster chips production
The US Department of Commerce (DoC) has unveiled its strategic vision to enhance the semiconductor supply chain in the United States. As part of the CHIPS for America investments, the DoC has announced funding opportunities for large semiconductor supply chain projects. These projects encompass materials and manufacturing equipment facility initiatives with capital investments of $300 million and above. In the autumn, a separate application process will be released for smaller projects that fall below this threshold.
The CHIPS for America Act, which became law in January 2021, aims to strengthen the US semiconductor industry and bolster its competitiveness in the global market. It provides funding and incentives for semiconductor research, development, and manufacturing in the country. The current announcement aligns with the Biden Administration’s ‘Investing in America’ tour, during which key government figures will visit 20 states to emphasize investments, job creation, and economic opportunities resulting from legislation such as the bipartisan CHIPS Act.
Secretary of Commerce Gina Raimondo emphasized the importance of the CHIPS and Science Act in ensuring the resilience of the microchip supply chain, particularly after the vulnerabilities exposed during the pandemic. The DoC’s strategic objectives, outlined in the document “Vision for Success,” include strengthening supply chain resilience by mitigating risks associated with geographic concentration, promoting US technology leadership by incentivizing domestic manufacturing equipment and materials suppliers, attracting non-US suppliers to establish a presence in the US, and establishing reliable supplier ecosystems to support each CHIPS-funded cluster.
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GM signs deal with Element 25 for battery materials
General Motors (GM) has partnered with Australian mineral specialist Element 25 to acquire 32,500 metric tons of manganese sulfate for its expanding electric vehicle (EV) business. This agreement will enable GM to surpass its goal of producing 1 million EVs in North America. As part of the deal, GM will provide Element 25 with an $85 million loan to construct a new facility in Louisiana. The facility, set to open in 2025, will be the first in the US to produce manganese sulfate, a crucial ingredient in lithium-ion battery cathodes.
This move by GM aligns with the industry-wide race to establish robust supply chains and secure key minerals for battery and EV production. It also meets the geographic sourcing requirements for EV tax credits outlined in the Inflation Reduction Act. GM’s investment in battery raw materials, processing, and components ensures a steady supply, favorable commercial terms, and job creation, particularly in the US, Canada, and countries covered by free trade agreements.
GM’s collaboration with Element 25 and the construction of the Louisiana facility will strengthen the supply chain for essential battery materials. This supports the growth of GM’s EV business, while contributing to job creation and regional economic development. Additionally, earlier this year, GM announced investments in a lithium mine in Nevada and a partnership with lithium producer EnergyX, demonstrating its commitment to securing critical resources for future EV production.
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The Netherlands announces restrictions on Chip exports
The Dutch government has introduced new rules to restrict the export of certain advanced semiconductor equipment, citing national security concerns. The move comes in response to pressure from the United States to limit the sales of high-tech components to China. The rules, which will take effect on September 1st, require companies manufacturing advanced chipmaking equipment to obtain a license before exporting it. The Dutch trade minister, Liesje Schreinemacher, stated that only a very limited number of companies and product models would be affected, without specifically naming China.
ASML, a key Dutch supplier of chipmaking equipment, confirmed that the top section of models of its second most advanced “DUV” lithography systems would require a license. However, ASML does not anticipate a significant impact on its financial forecasts. The restrictions imposed by the Dutch government are part of an agreement between the United States, the Netherlands, and Japan to tighten export controls on chip equipment, aiming to limit China’s ability to develop its own chips.
While the exact impact on the supply chain is yet to be seen, the restrictions could potentially disrupt the flow of advanced semiconductor equipment. ASML’s shares declined following the announcement, and other companies in the industry, such as ASM International, may also be affected. It remains to be seen whether other European countries will adopt similar measures or if the Dutch list will be integrated into the European Union’s restrictions. The introduction of these rules reflects the broader tensions between the US and China over technology and security, with implications for the global semiconductor supply chain.
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