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U.S. Defense Department looks to bolster domestic chip manufacture with new program

SAN FRANCISCO, Dec 17 (Reuters) - The U.S. Defense Department will soon start soliciting proposals for a program to provide incentives to boost semiconductor manufacturing capabilities in the United States, according to a posting on a government contracting site.

Major American semiconductor companies such as Apple Inc , Qualcomm Inc and Nvidia Corp rely on outside manufacturers such as Taiwan Semiconductor Manufacturing Co Ltd (TSMC) or Samsung Electronics Co Ltd to fabricate their chips in what are called foundries.

Most of those foundries are located in Taiwan or South Korea. While Intel Corp operates U.S. chip factories, they are mostly dedicated to manufacturing its own chips rather than doing work for outside clients.

The Defense Department is looking to change that dynamic by providing incentives for the development of chip-related intellectual property and the creation of advanced foundries in the United States, according to a notice posted to the website of the National Security Technology Accelerator, a nonprofit group that works to connect private-sector companies to government contract opportunities.

The foundries would handle commercial work from U.S. companies and could also provide components to the Defense Department, it said.

The Defense Department plans to announce a program called “Rapid Assured Microelectronics Prototypes – Commercial”, or “RAMP-C” for short, that will complement existing programs it recently launched to encourage U.S. chip manufacturing.

“There is currently no commercially viable option that can provide a U.S. located leading-edge foundry that can fabricate the assured leading-edge custom integrated circuits and Commercial off the Shelf (COTS) products required for critical DoD systems. The purpose of the RAMP-C program is to incentivize such an option,” the posting said.

In October, one of Intel’s plants in Arizona won the second phase of a contract aimed at helping the U.S. military develop advanced chips more quickly. TSMC, a major supplier to Apple, is also independently working to build a $12 billion chip plant in Arizona, where Phoenix city officials last month authorized a development agreement related to the project. (Reporting by Stephen Nellis, Editing by Rosalba O’Brien)

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