‘A boon for economic recovery’: Local tech companies seek money for CHIPS law

“This is going to be an economic boost for our region,” said James Brett, president of the New England Council, a regional trade association that lobbied for the law to be passed.

Massachusetts is unlikely to attract a massive new chip factory. Many of the world’s biggest chipmakers have already committed to other US locations, including Texas, Arizona and Ohio, where semiconductor giant Intel will soon begin building two new factories for a cost $20 billion.

But some of the money will be available for upgrading existing factories. That’s good news for Analog Devices, the state’s top chipmaker. With fiscal 2021 revenue of $7.3 billion, Analog Devices operates manufacturing facilities in Wilmington and Chelmsford, as well as several other locations around the world. The company doesn’t make the kind of high-end computer and graphics chips offered by giants like Intel, AMD, and Nvidia. Instead, it produces less glamorous but essential products that process analog data in cars, computers and countless other devices.

Rebecca Diaz, vice president of government affairs at Analog Devices, said in an email that her company hopes to leverage new federal grants and tax benefits to expand manufacturing capacity. Diaz also noted that the CHIPS Act includes funding for the development of a new National Semiconductor Technology Center to conduct research on advanced chip design. She said Analog Devices was eager to participate.

“It will ensure continued American leadership in the next generation of semiconductor technologies,” Diaz said.

Another keen observer is Woburn-based Nantero, a Harvard University spin-off that manufactures memory chips incorporating extremely small carbon tubes. According to general manager Rob Snowberger, Nantero chips use much less power than traditional memory chips. But while the company has made small batches of chips for military and aerospace customers, Snowberger said the company’s venture capitalists couldn’t find the hundreds of millions needed to build a full-scale factory for the mass production.

“In the semiconductor business, one level of venture capital funding is not enough to get you where you need to go,” Snowberger said. He had considered moving Nantero to Japan, but with the passage of the CHIPS law, he now hopes to secure federal funds to build a factory here.

“Boston is our home, and we don’t want to leave,” Snowberger said.

Many of the likely state beneficiaries do not manufacture tokens; instead, they build the complex and expensive machines used by chipmakers. For example, Onto Innovation in Wilmington manufactures multimillion-dollar systems that measure nanoscale features on silicon wafers, to ensure they are manufactured correctly. And MKS Instruments in Andover manufactures a range of products used in the chemical treatment of silicon wafers, as well as optical systems to etch circuits onto chips.

As chipmakers use their grants to build new factories or expand existing facilities, companies like Onto and MKS expect a surge in new orders. “We’re mostly going to benefit from our customers buying more stuff,” MKS chief executive John Lee said.

MKS and Onto are also partnering with MIT Lincoln Lab and UMass Lowell to propose building an advanced research center in Massachusetts focused on semiconductor packaging. Increasingly, microprocessors are made of “chiplets” – specialized ribbons of silicon bound together in a single integrated package.

But assembling ever more sophisticated chips into a single package will require a major investment in research. The CHIPS Act set aside $2.5 billion for advanced packaging research. Ben Brown, Onto’s assistant general counsel, said the MKS-Onto consortium hopes to see the lab built in Massachusetts.

“It would help the general American ecosystem to do things that are more advanced than what currently exists in the United States,” he said.

Hiawatha Bray can be contacted at hiawatha.bray@globe.com. Follow him on Twitter @GlobeTechLab.

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