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Despite uncertainty surrounding the future of the federal CHIPS and Science Act, semiconductor industry insiders in Indianapolis this week mostly said they’re pressing forward with hope.
Indiana has been a major beneficiary of the 2022 CHIPS Act, which allocated $53 billion in federal incentives for U.S.-based semiconductor manufacturing, research and development. U.S. Sen. Todd Young, a Republican from Indiana, was an author of the legislation. (CHIPS stands for Creating Helpful Incentives to Produce Semiconductors.)
However, President Donald Trump has criticized the initiative since taking office, calling the Biden-era legislation “a horrible, horrible thing” in his address to Congress last month. And earlier this week, Trump ordered the creation of the U.S. Investment Accelerator, an entity within the Department of Commerce that would, among other things, oversee the CHIPS Act, with a focus on “negotiating much better deals than those of the previous administration.”
Indiana is already benefitting from CHIPS-supported developments.
South Korean chip manufacturer SK Hynix Inc. is set to receive up to $450 million in federal CHIPS Act support for its planned $3.87 billion semiconductor packaging facility at the Purdue Research Park in West Lafayette. Two federal tech alliances, the Indianapolis-based Heartland BioWorks Hub and the Odon-based Silicon Crossroads Microelectronics Commons Hub, are also benefitting from the CHIPS Act, receiving initial funding of $33 million and $51 million, respectively.
These projects and more helped convinced Semi, a California-based organization that supports the global semiconductor industry, to host its first-ever Midwest-based conference this week in Indianapolis.
The two-day event, held at the Indiana Convention Center, drew about 1,100 attendees from around the U.S. and included economic development officials from Indiana, Michigan and Ohio, as well as representatives from semiconductor industry manufacturers, suppliers and others.
Semi hosts semiconductor industry events around the world. Joe Stockunas, president of Semi Americas, said the time was right for his organization to add a Midwestern event. “We’ve got activities going in all three states, and the region’s really picked up nicely. We really didn’t have a presence in the region before two years ago.”
Stockunas acknowledged that recent changes in Washington D.C. have created some uncertainty around the fate of the CHIPS Act—although, to a degree, he expected some uncertainty no matter the outcome of November’s election.
“A fog is upon us,” Stockunas said.
Still, he said Semi is predicting big industry growth over the next few years.
The organization is forecasting that global semiconductor industry revenue will reach $1 trillion by 2030—a 63% increase over last year’s $614 billion. Put another way, that forecast represents annual revenue growth of about 10% over the next five years.
Stockunas said general manufacturing and automotive manufacturing, in particular, are two of the semiconductor industry’s biggest areas of opportunity. Automotives are using an increasing number of microchips in everything from safety sensors to engines, Stockunas said, and manufacturers in general are using more microchips as they add technology into their production processes.
“I think the position that Indiana, Michigan and Ohio have relative to automotive manufacturing lends itself very well to advancements in in our marketplace, and that’s why we’re here,” Stockunas said.
Exhibitors at this week’s conference expressed cautious optimism.
Jehan Press, an account representative with Atlanta, Georgia-based Class One Equipment, said that right after the passage of the CHIPS Act, his company was busy with queries from potential customers. Class One sells new, used and refurbished equipment to the semiconductor industry.
Now, the mood is more muted, and Press said some customers are waiting on CHIPS Act money. “I see a little bit of hesitation in purchases. It’s a little too early to say it’s really impacted us yet. But, you know, it’s just a sense of trepidation.”
Dan Miles, president of the Indianapolis-based Applied Engineering Services, said his company had been expecting to do work on Minnesota-based SkyWater Technology’s $1.8 billion semiconductor R&D and fabrication facility, which was to have been built in West Lafayette. But the project was not selected for CHIPS Act funding, and last year SkyWater canceled the project.
Applied Engineering is currently finishing up a clean-room project at Purdue University’s Birck Nanotechnology Center, which does research and development on semiconductors and other technologies. Because Purdue is also involved with the SK Hynix project, Miles said he’s hopeful that the Birck Nanotechnology project will lead to other semiconductor-related opportunities for his company in the future.
Miles said that even if the CHIPS Act is amended in some way, he’s hopeful the legislation will continue to spur activity in Indiana: “I’m still optimistic, and I think most people that I’ve spoken with are.”
Another exhibitor at this week’s conference was Elizabeth Cooper, co-founder of Los Alamos, New Mexico-based software company ErgoTech. More than half of the company’s business comes from the semiconductor industry.
“We pay attention to (the uncertainty),” she said, “but there’s nothing we can do.”
Correction: The spelling of Semi Americas President Joe Stockunas’ name has been corrected from an earlier version of this story. You can see more IBJ corrections here.
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