Today, the U.S. Department of Commerce announced the signing of four separate non-binding preliminary memoranda of terms (PMT) under the CHIPS and Science Act to provide up to $105 million in proposed direct funding to Analog Devices, Inc. (“ADI”), up to $79 million in proposed direct funding to Coherent, up to $10.3 million in proposed direct funding to Intelligent Epitaxy Technology, Inc. (“IntelliEPI), and up to $52.1 million in proposed direct funding to Sumika Semiconductor Materials Texas Inc., (“Sumika”). The proposed investment in ADI would support the expansion and modernization of two advanced research & development (R&D) and Radio Frequency (RF) Microwave (MW) systems manufacturing facilities in Chelmsford, Massachusetts, as well as expand and modernize two semiconductor fabrication facilities in Beaverton, Oregon and Camas, Washington which could create up to an estimated 500 manufacturing and engineering jobs across all sites with proposed CHIPS funding. The proposed investment in IntelliEPI would support the expansion and modernization of it’s existing manufacturing facility in Allen, Texas to increase production of epitaxial wafers and could create 40 manufacturing jobs and 16 construction jobs. The proposed investment in Coherent would support the expansion of it’s existing manufacturing facility in Easton, Pennsylvania and would create approximately 360 jobs. The proposed investment in Sumika would support the construction of a greenfield factory in Baytown, Texas to manufacture high-purity chemicals and could create over 290 jobs.
“Thanks to the bipartisan CHIPS and Science Act, we are making targeted investments up and down the semiconductor supply chain to revitalize semiconductor manufacturing in the United States and advance U.S. economic and national security,” said U.S. Secretary of Commerce Gina Raimondo. “The proposed investments we’re announcing today would support projects that will bolster semiconductor and materials production across the country and advance America’s technological leadership on the world stage.”
The proposed funding announced today would support the following projects:
- ADI (Chelmsford, Massachusetts; Beaverton, Oregon; Camas, Washington): The Department of Commerce’s proposed investment of up to $105 million would support the company’s projects in Massachusetts and the Pacific Northwest. The investment in Massachusetts would enable the company to increase module production output for its packaging and test facility, which would expand capacity for commercial, space, and defense applications as well as new commercial phased array antenna and sensor solutions. CHIPS for America’s proposed investment in Oregon and Washington would support the expansion of front-end mature node semiconductor manufacturing for devices used in a wide variety of applications, including but not limited to automotive, industrial, and defense applications. The proposed funding for the Oregon and Washington project also aims to increase capacity at the facilities by 70% across a variety of mature node processes, including onshoring 180nm and 350nm process nodes important to diverse end markets. As part of this modernization, ADI would undertake efforts to reduce the use of solvents at its Oregon and Washington facilities using state-of-the-art processes which are more environmentally friendly. To advance the company’s workforce efforts and community investments, ADI plans to build on its partnerships with local universities, community colleges, and other education partners. As part of the Oregon and Washington project, ADI has launched the Semiconductor Advanced Manufacturing Upskilling (SAMU) technician training facility, which will offer programs to support manufacturers and collaborators in the Silicon Forest. ADI also plans to provide additional financial support for manufacturing employees to achieve associate degrees and technical certifications.
- Coherent (Easton, Pennsylvania): The Department of Commerce’s proposed investment of up to $79 million would support the expansion of Coherent’s existing manufacturing facility in Easton, Pennsylvania to increase production capacity of 150mm and 200mm silicon carbide (SiC) substrates. The proposed CHIPS investment would also support the expansion of the facility’s SiC epitaxial wafer manufacturing capacity, back-end of line processing, electronic performance, and reliability testing capabilities. SiC substrates are an important bandgap material with end uses in energy and military applications. CHIPS for America’s proposed investment to expand Coherent’s production capacity in Easton could increase its substrate capacity by over 750,000 substrates per year and more than double the output of epitaxial wafersper year. The proposed project is expected to create 320 manufacturing jobs and 40 construction jobs.
- IntelliEPI (Allen, Texas): The Department of Commerce’s proposed investment of up to $10.3 million would support the expansion and modernization of IntelliEPI’s existing manufacturing facility in Allen, Texas. IntelliEPI is a leading provider of epitaxy wafers for advanced compound semiconductor applications. The company specializes in the growth of high-quality epitaxy material on Indium Phosphide (“InP”), Gallium Arsenide (“GaAs”), Gallium Antimonide (“GaSb”), and Gallium Nitride (“GaN”) compound semiconductor wafers based on an advanced production Molecular Beam Epitaxy (MBE) technology platform. IntelliEPI serves a global clientele in markets spanning defense, AI/datacenters, telecommunications, automotive, and more. Through this proposed investment, CHIPS for America could strengthen the U.S. semiconductor supply chain by expanding domestic capacity for epitaxy wafers. This proposed project is expected to create 40 manufacturing jobs and 16 construction jobs.
- Sumika (Baytown, Texas): The Department of Commerce’s proposed investment of up to $52.1 million would support the construction of a greenfield factory in Baytown, Texas to manufacture ultra-high purity (UHP) isopropyl alcohol (IPA) used in advanced logic and memory chip production. Sumika is a subsidiary of the Japan-based Sumitomo Chemical Co., LTD, the largest global producer of high-purity chemicals for the semiconductor industry. The proposed investment represents the company’s first major investment in high-purity chemicals production in the U.S. UHP IPA production is almost entirely concentrated in East Asia. Through this proposed investment, CHIPS for America would strengthen the U.S. semiconductor supply chain by ensuring a domestic supply of this key semiconductor manufacturing components and reducing risk involved in shipping UHP IPA across the globe. To advance its local workforce efforts, Sumika has partnered with the Lee College Center for Workforce and Community Development and San Jacinto College with the goal of structuring classes or new curriculum units to educate and train students in high purity chemical processing. The proposed project is expected to create 43 manufacturing jobs and 250 construction jobs.
“ADI is at the forefront of innovation in the expansion of U.S. semiconductor manufacturing,” said Vincent Roche, CEO and Chair at Analog Devices. “Our focus on enabling innovation at the Intelligent Edge is driving advancements in process technologies that are critical to our global customer base. This investment will help us strengthen our workforce training and community partnerships, as well as expand our efforts to manage our environmental footprint.”
“We are deeply honored to partner with the U.S. Department of Commerce under the CHIPS and Science Act to support the growth of critical silicon carbide infrastructure here in the U.S.,” said Rob Beard, Chief Legal and Global Affairs Officer for Coherent. “This proposed investment reflects a shared commitment to strengthening domestic manufacturing, advancing cutting-edge technologies, and creating high-quality jobs in Pennsylvania. By expanding our production capabilities for silicon carbide substrates and epitaxial wafers, Coherent is poised to drive innovation and meet the growing demand for materials that power energy and advanced applications.”
ADI and Coherent have indicated they plan to claim the Department of the Treasury’s Advanced Manufacturing Investment Credit (CHIPS ITC), which is 25% of qualified capital expenditures. Click here to learn more about the tax credit.
As explained in its first Notice of Funding Opportunity, the Department of Commerce 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 proposed amount and form of the award. The proposed award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After a PMT is signed, the Department of Commerce 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.
