Biden awards up to $75 million in CHIPS Act grant to Entegris

FILE PHOTO: U.S. President Joe Biden holds a semiconductor chip as he speaks prior to signing an executive order, aimed at addressing a global semiconductor chip shortage, in the State Dining Room at the White House in Washington, U.S., February 24, 2021. REUTERS/Jonathan Ernst/File Photo

(Reuters) - American Chip manufacturing supplier Entegris said on Wednesday that it has inked a preliminary deal with the Biden administration for funding of up to $75 million to aid the development of a new facility in Colorado Springs, Colorado.

"We’re not just bringing leading-edge chip technology and (factories) to the United States, we’re also bolstering the suppliers that make leading-edge manufacturing possible,” U.S. Secretary of Commerce Gina Raimondo said in a statement.

The announcement is the latest in a string of Chips and Science grants as the U.S. seeks to expand domestic chip production and lure away capital that might have been used to build plants in China and the region. Big winners include South Korean's Samsung, U.S.-based Intel, and Taiwan's TSMC.

Congress in 2022 approved the Chips and Science Act to boost domestic semiconductor output with $52.7 billion in research and manufacturing subsidies. Lawmakers also approved $75 billion in government loan authority.

According to the Commerce Department, the project's first phase would support the production of liquid filter membranes and Front Opening Unified Pods (FOUPS), specialized containers invented by Entegris to secure semiconductor wafers when transported during the manufacturing process. Top chipmakers including Intel, TSMC, Micron, and GlobalFoundries are FOUP customers, the agency added.

The second phase would support the production of advanced liquid filters, purifiers and fluid handling solutions, Commerce said.

Sanctioned Chinese chip manufacturer SMIC has also been an important customer for Entegris. Reuters reported in February that the Commerce Department halted millions of dollars worth of shipments of chipmaking materials and parts from Entegris to SMIC's most advanced facility, after SMIC produced a sophisticated chip for Huawei's Mate 60 Pro phone.

Reuters found no evidence that Entegris had violated any U.S. laws or regulations.

(Reporting by Kanjyik Ghosh and Alexandra Alper; Editing by Sonia Cheema and Nick Zieminski)