The US Department of Commerce revealed it would direct up to $1.6 billion in funding toward developing new technology for domestically packaging chips, which marked another move to boost the local semiconductor industry.

The funding from the CHIPS and Science Act will be used to create competition across five areas: equipment and tools; power delivery and heat management; connector technology; electronic design automation; and development of a chiplets ecosystem.

Each of the sectors could receive up to $150 million.

In addition to backing research, the funding is expected to include opportunities for prototype developments.

The Department of Commerce stated “advanced packaging allows manufacturers to make improvements in all aspects of system performance and function and to shorten time to market”.

Its plan would also reduce the US’ reliance on semiconductor packaging abroad.

Bloomberg reported the US accounts for 3 per cent of the world’s packing capacity, with most of it taking place in Asia.

The news site noted Samsung, Intel and SK Hynix are in the process of building advanced packaging facilities in the US.

US Secretary of Commerce Gina Raimondo stated the administration of President Joe Biden made it “clear that we need to build a vibrant domestic semiconductor ecosystem here in the US, and advanced packaging is a huge part of that”.