The US CHIPS law puts IBM’s semiconductor technology in the spotlight

Recent legislation creates an opportunity for IBM to play a central role in a resurgent US semi-finished goods industry.

I hope that one day, hopefully soon, I can write a story about IBM hardware without first correcting the misconception that the IT company has exited the hardware business. While divesting its factories and x86 PCs and servers, it has continued to invest in semiconductor research and product development, both for its server businesses (z mainframes and power servers) and the fundamental research it does with partners such as Samsung, Applied Materials, Tokyo Electron and many others. As the semiconductor industry hopes to regain its manufacturing mojo in the US, IBM Research appears well-positioned to leverage the technology and community it has nurtured for decades and exercise its leadership role. Let’s take a look at IBM Research’s motivation and capabilities.

First, why is IBM still making semiconductors?

First of all out of necessity. IBM POWER servers and z mainframes, which represent billions of dollars in hardware, software and services revenue for Big Blue, use fully custom silicon designed by IBM engineers. These systems require specialty silicon to deliver their differentiated value in terms of performance, scalability, reliability, availability and serviceability that IBM hardware customers depend on.

Second, IBM Research has been delivering industry firsts in manufacturing process innovation for decades. In addition to providing z and POWER chips, this organization licenses industry advanced technology. In fact, IBM Research invented the process used across the industry for “7nm FinFET Technology Featuring EUV Patterning and Dual-Strained High-Mobility Channels” in 2016. If you don’t know what that means, just look at your phone what has been made possible by the widespread adoption of this technology from IBM by semi-foundries around the world.

Recently, in 2021, IBM Research announced that it was on its way to 2nm silicon transistors with its gate-all-around (GAA) nanosheets. This technology was demonstrated on a 300 millimeter (mm) wafer built at IBM Research’s semiconductor facility in Albany, NY. Which brings us to the CHIPS Act.

Enter the CHIPS law

Recent legislation funding the CHIPS Act provides a $280 billion over 10-year spending package aimed at spurring growth in the US-based semiconductor industry, including manufacturing, and the skilled workforce needed to operate it . It named the National Semiconductor Technology Center (NSTC) with the intention of securing our supply chain and fostering a leading technology that the US now enjoys in the areas of high performance computing, networking and heterogeneous accelerators. These are areas where the US has been a leader since its inception, but China is fast catching up and potentially threatening TSMC’s Taiwan-based supplies.

With over $50 billion to be invested in the domestic manufacturing portion of the program over five years, US DOC plans to spend approximately $11 billion on advanced semiconductor R&D and $39 billion to to accelerate and advance domestic chip production. The $11 billion R&D portion includes the DOC National Semiconductor Technology Center (“NSTC”) and the DOC National Advanced Packaging Manufacturing Program (“NAPMP”). The NTSC NSTC is a ‚Äúpublic-private partnership to conduct advanced R&D and prototyping in semiconductor manufacturing; invest in new technologies; and expand employee training and development opportunities. The NAPMP is a federal R&D program to strengthen advanced assembly, testing and packaging (“ATP”) capabilities in coordination with the NSTC. Also funded are DOC Manufacturing USA Semiconductor Institute and DOC Microelectronics Metrology R&D.

If you were hosting this show, you would want to leverage the best expertise and facilities in the US to lay the groundwork, including IBM’s research organization, to build partnerships with industry, academia and government institutions. The Albany NanoTech Complex adjacent to the State University of New York (SUNY) on the Albany campus includes the facilities built in partnership with NY CREATES. The ecosystem includes other firms, including Samsung (which has major foundries in Austin, Texas), semiconductor equipment makers like Tokyo Electron (TEL), and EDA tool providers. So here you have the infrastructure, expertise and academic connections + everything is ready to go. Therefore, the Albany complex and IBM Research form the ideal center of innovation that the NSTC needs. Just add money. A lot of money.

Mukesh Khare explains IBM’s perspectives in this interview:

But wait, there’s more!

We should note that this is happening as the semiconductor industry itself refocuses on two new synergistic semiconductor pillars: AI and chiplets. AI can change how computers are programmed and what they can do. Chiplets will change their construction, as system-on-package instead of system-on-chip.

The IBM AI Hardware Research Center previously announced that it had developed the hardware and software to significantly improve the foundation of AI acceleration: reducing the computation required to create accurate predictions using low-precision math. IBM has informed us that the company now plans to make this AI technology available to its partners, first as silicon called AIU on a PCIe board and then as IP for chiplet implementations.

IBM has also worked with Tokyo Electron (TEL) to develop efficient 3D stacking technology for chiplet designs and has an active research program to develop 2.5 and 3D die stacking and the processes that make special processes such as laser debonding have to cope with.

For more perspectives direct from IBM Research, here is an interview with IBM Research’s Rama Divakaruni on the benefits and challenges of chiplets:


We welcome the US government’s willingness to invest in restoring America’s semiconductor manufacturing capabilities. However, we suspect that these efforts will likely require additional funding to meet their goals. Eventually, we have allowed our capacity to mass-produce advanced process chips to dwindle, until today only one company (Intel) has the required fab facilities. However, we believe that the unique collaboration of industry, academia and government institutions enabled by the NanoTech Complex will be the right model for the CHIPS Act to achieve its goals and that it should be expanded and replicated elsewhere. And we believe that IBM Research will play an increasingly important role in this effort.

disclosure: This article represents the opinion of the authors and should not be construed as a recommendation to buy or invest in the companies mentioned. Cambrian AI Research is fortunate to have many, if not most, semiconductor companies among our clients including Blaize, Cerebras, D-Matrix, Esperanto, FuriosaAI, Graphcore, GML, IBM, Intel, Mythic, NVIDIA, Qualcomm Technologies, Si- Five ,, Synopsys and Tenstorrent. We have no investment positions in any of the companies mentioned in this article, nor do we plan to open one in the near future. Visit our website at for more information.


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