According to the U.S. Department of Commerce, the CHIPS Act funding would go toward a new Infinera “advanced packaging and test” semiconductor facility in Bethlehem and a semiconductor fabrication plant in San Jose, Calif.
The Bethlehem plant is expected to bring up to 291 manufacturing jobs and 500 construction jobs to the region, and, alongside the new California facility, would increase Infinera’s manufacturing capacity by at least 10 times. The exact timing of the project was not immediately made public, and the award was announced via a “non-binding preliminary memorandum of terms,” so the exact size and terms of the award are not yet finalized.
“We are grateful for the bipartisan efforts under the CHIPS and Science Act to increase semiconductor fabrication and packaging in the U.S. and protect our national and economic security,” Infinera CEO David Heard said in a statement. “The proposed CHIPS funding will enable us to better secure our supply chain and compete more effectively with foreign adversary nations.”
The 2022 CHIPS Act earmarked $50 billion to strengthen U.S. semiconductor chip manufacturing. President Joe Biden proposed the law in the face of a national shortage of semiconductor chips that lasted from 2020 to 2023. The United States has largely been reliant on semiconductors manufactured in China, and interruptions to their supply chain caused the shortage.
Semiconductors are used in electrical circuits that conduct electricity, and are critical to most modern technology products.
“From artificial intelligence to electric vehicles to telecommunications infrastructure, 21st century technologies all rely on optical semiconductors like the ones manufactured by Infinera,” U.S. Secretary of Commerce Gina Raimondo said in a statement.
The specific type of semiconductors that Infinera is known for, called indium phosphide-based photonic integrated circuits, enable fast transfer of large amounts of data, so demand for them is expected to increase as artificial intelligence becomes more widespread, according to a news release from the U.S. Department of Commerce.
Pennsylvania Sen. Bob Casey said investing in U.S. semiconductor manufacturing is important for both national security and local economies.
“The fact that you have a preliminary agreement is a really positive development for the opportunity both to create jobs and to invest in manufacturing in the Lehigh Valley,” Casey said in an interview with The Morning Call.
In a statement, U.S. Rep. Susan Wild, D-7th District, also lauded the investment. Both Casey and Wild wrote letters to Raimondo calling for Infinera to receive the award.
“I was proud to help secure this funding for Infinera, to support our national security and intelligence communities and bolster our local economy and manufacturing ecosystem,” Wild said.
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