The Biden administration on Wednesday announced that it was awarding $238 million through the Defense Department to set up eight hubs around the United States for promoting innovation in the semiconductor industry. The funds are one of the earliest releases of the nearly $53 billion in grants and subsidies that Congress and the Biden administration have approved to build up the domestic semiconductor industry, which U.S. officials say has been left vulnerable by decades of offshoring. The Biden administration has a variety of funding programs in the works to encourage chip research institutions and manufacturers to set up operations in the United States. Most of these programs are run through the Commerce Department, and many will begin handing out money this fall. While U.S. companies still design many of the world’s most advanced chips, much of the manufacturing of the technology has been outsourced to foreign locations, including Taiwan, leaving U.S. chip supply vulnerable if, for example, the Chinese government were to invade Taiwan. The awards announced Wednesday will go to research institutes, consortiums and universities located in New York, Arizona, Indiana, Ohio, California, North Carolina and Massachusetts, defense officials said. Each hub will receive $15 million to $40 million to fund the development of new chips for use in electromagnetic warfare, artificial intelligence, 5G and 6G wireless technologies, and quantum computing, among other areas. While the research will be directed at meeting the needs of the Defense Department, it is also expected to be useful for commercial applications.
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