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Absolics Secures $75 Million U.S. Government Subsidy Under CHIPS Act

First Non-Chip Manufacturer to Receive Semiconductor Subsidies for Innovative Glass Substrates
South Korea
s 011790.KO Mid and Small Cap 2000
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Absolics, a subsidiary of SKC, has become the first semiconductor materials and parts company to receive subsidies from the U.S. government, marking a significant milestone for the industry. On May 23, the U.S. Department of Commerce announced a Preliminary Memorandum of Terms (PMT) to provide Absolics with $75 million in semiconductor production support funds under the CHIPS Act.

This subsidy targets Absolics’ pioneering glass substrate plant in Covington, Georgia. The $75 million funding accounts for 25% of the total $300 million investment required for the plant. Recently completed, the facility has begun trial operations, with commercial mass production expected to start in the first half of next year. The first plant boasts an annual production capacity of 12,000 square meters.

Looking ahead, Absolics plans to expand its production capabilities significantly by building a second plant with an annual production capacity of 72,000 square meters. This project is anticipated to involve an investment of over $400 million.

Established in 2021, Absolics is a joint venture between SKC and Applied Materials (AMAT), a leading semiconductor equipment company. The company specializes in semiconductor packaging glass substrates, a groundbreaking innovation poised to revolutionize the industry. Unlike traditional plastic substrates, Absolics’ glass substrates can be manufactured thinner, reducing power consumption by more than 30% and offering faster data processing speeds.

Glass substrates are expected to be a game-changer for high-speed processing of large-scale data, including applications in artificial intelligence (AI). This innovation has generated significant interest from big tech companies operating large-scale data centers and high-performance semiconductor manufacturers due to its efficiency and performance advantages.

The U.S. government’s support underscores the strategic importance of advancing semiconductor materials and parts to enhance the overall semiconductor supply chain. Absolics’ successful securing of this subsidy highlights its role at the forefront of semiconductor innovation and its potential to significantly impact the industry’s future.

 

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