US to invest $1.6b in advanced chip packaging technology

The United States expects to direct up to $1.6 billion in funding to boost semiconductor packaging, the Commerce Department said Friday, as Washington seeks to stay ahead in tech while competition with China intensifies.

The funding comes under the CHIPS and Science Act, a package of incentives to boost research and US semiconductor production.

"Securing domestic packaging capabilities is a key part of our mission to expand domestic semiconductor manufacturing," said US Secretary of Commerce Gina Raimondo in a statement.

Semiconductor packaging allows components to be combined as a single electronic device, and the latest investment seeks to drive innovation in this process.

The aim, said the Commerce Department, is to help develop a "self-sustaining, and profitable, domestic advanced packaging industry."

The bulk of semiconductor assembly, test, and packaging facilities are in Indo-Pacific countries, the Center for Strategic and International Studies noted last year.

The CHIPS and Science Act frees up to $52 billion in subsidies to stimulate US domestic semiconductor production.

The United States used to make nearly 40 percent of the global chip supply, but now produces only about 10 percent, the White House has said. None of these are the most advanced chips.