se billions of dollars in spending and tax incentives to promote technology innovation across the entire semiconductor ecosystem — from post-Moore’s Law basic research to advanced chip packaging.

While the Trump Administration seeks to block China’s access to U.S. chip making equipment via export controls, the CHIPS for America Act — as in “Creating Helpful Incentives to Produce Semiconductors — proposes to revive domestic chip-making, fund R&D, and secure technology supply chains.

Aside from the marketing aspects, CHIPS for America also earmarks at least $12 billion to fund existing Pentagon electronics “resurgence” efforts while spreading $5 billion across other federal agencies for semiconductor R&D. The largest chunk — $5 billion — would fund an IC packaging and assembly institute. That effort also would also create a $500 million investment fund to support a “domestic advanced microelectronics packaging ecosystem.”

A similar but separate U.S. packaging effort in the critical re-election state of Florida provides Defense Department industrial base funding to leverage digital twin technology to protect the microelectronics supply chain. A small but growing Florida non-profit called BRIDG recently received another $7.5 million contract from the Air Force Research Laboratory aimed at gathering data on chip design and manufacturing processes.

The public-private partnership is licensing technology from IMEC, the chip R&D center based in Belgium, to develop product design kits for silicon interposers.

U.S. Commerce Secretary Wilbur Ross toured BRIDG’s facility near Kissimmee, Fla., on June 12. “Central Florida is critical to America’s microelectronics manufacturing supply chain and its defense and aerospace customers,” Ross declared. Along with IMEC, BRIDG partners include Lockheed Martin, L3Harris, Tokyo Electron and the State of Florida.

The swirl of activity around chip manufacturing and tightening technology supply chains comes amidst a U.S.-China standoff over semiconductor technology. Most notably, the campaign includes the use of American export controls to block Chinese access to U.S. advanced IC manufacturing gear. The primary target is telecommunications giant and 5G leader Huawei.

Taken together, the recent spate of Administration and Congressional efforts to shore up U.S. chip manufacturing illustrate the strategic importance of silicon technology. In the growing technology cold war between Beijing and Washington, “semiconductors are a chokepoint,” said James Lewis, director of the technology policy program at the Washington-based Center for Strategic and International Studies.

The CHIPS Act represents a new front in concerted if scattershot U.S. efforts to revive U.S. semiconductor manufacturing and supply chain vulnerabilities exposed by the novel coronavirus. “This bill reinvests in this national priority, providing targeted tax incentives for advanced manufacturing in the U.S., funding basic research in microelectronics and emphasizing the need for multilateral engagement with our allies in bringing greater transparency and attention to security and integrity threats to the global supply chain,” said chief sponsor Sen. Mark Warner, D-Va.

The proposal also responds to U.S. “complacency [that] has allowed our competitors — including adversaries — to catch up,” added Warner, whose office did not respond to requests for details.

Industry groups predictably applauded the Senate proposal, which was also sponsored by Sen. John Cornyn, R-Texas. Similar legislation was scheduled to be introduced this week in the House. Other co-sponsors of the Senate bill include Jim Risch, R-Idaho, Marco Rubio, R-Fla., and Kyrsten Sinema, D-Ariz.

Among the CHIPS Act’s provisions are incentives for investing in domestic IC manufacturing, specifically a 40-percent investment tax credit good through 2024. The credit would be phased out in 2027.

Meanwhile, the packaging initiative also would promote standards development and workforce training.

Industry groups backing the legislation noted they have long advocated federal tax credits “to help level the playing field,” a reference to Beijing’s efforts to jumpstart a domestic chip industry.

“The availability of robust incentives in other countries and the lack of a federal U.S. incentive have been key factors driving the location of semiconductor manufacturing facilities overseas,” the industry group SEMI noted in backing the Senate chip legislation.

“As global competitors invest big to attract advanced semiconductor manufacturing to their shores, the U.S. must get in the game and make our country a more competitive place to produce this strategically important technology,” added John Neuffer, president and CEO of the Semiconductor Industry Association.

The technological competition between the China and the rest of the world is being played out in the race to deploy 5G networks. U.S. export controls are intended to keep key manufacturing technologies out the hands of Chinese telecom giant Huawei and key suppliers like its HiSilicon unit and Semiconductor Manufacturing International Corp., Beijing’s answer to TSMC.

A technology Cold War between the U.S. and China threatens to create a bifurcated market for 5G networks, something analysts like Lewis of CSIS think is unworkable. “The market is not going to support” that approach, Lewis said. “There’s a point where even [Huawei] can’t bend the market” for 5G.