The US CHIPS and Science Act, signed into law in August 2022, represents a landmark initiative to strengthen domestic semiconductor manufacturing while enhancing the security and transparency of chip supply chains. As global tensions and supply disruptions have highlighted the vulnerabilities in critical technology sectors, the CHIPS Act provides substantial federal incentives to encourage the onshoring of chip fabrication and the development of secure, resilient supply chains for semiconductors. With billions of dollars allocated to support manufacturing facilities, research initiatives, and workforce development, the Act sets a new standard for supply chain diligence, requiring foundries and related businesses to demonstrate traceability and accountability at every tier of production.
A cornerstone of the CHIPS Act’s supply chain focus is the need to verify the origin and integrity of raw materials used in chip manufacturing, particularly silicon, which forms the foundation of most semiconductor devices. US foundries seeking CHIPS Act funding or compliance recognition are expected to adopt rigorous sourcing and documentation protocols that trace raw silicon back to its origin. To achieve this, foundries can leverage open data provided by the US Department of Agriculture (USDA) and the US Geological Survey (USGS). The USGS maintains detailed datasets on domestic mineral extraction, including the location, capacity, and output of quartz and silicon mines that supply the semiconductor sector. Foundries should establish a process for cross-referencing supplier declarations with these datasets to confirm that raw materials are sourced from approved domestic operations or trusted international partners that meet security and sustainability criteria.
Integrating USDA datasets may seem unconventional for semiconductor supply chains, but they can provide useful supplementary data in cases where silicon producers are linked to agricultural land use or conservation requirements. For example, mining operations that co-locate with USDA-monitored land conservation programs may have additional environmental obligations that align with broader sustainability goals under the CHIPS Act. Foundries can incorporate this data to strengthen their environmental and social governance (ESG) disclosures, which are increasingly relevant for securing public funding and satisfying stakeholder expectations.
To operationalize secure traceability of silicon sources, foundries should adopt a methodology that combines traditional documentation with advanced technologies like blockchain. A blockchain-based traceability system can authenticate wafer origins at every step of production, from quartz mining to wafer fabrication. Foundries should begin by mapping their supply chain for raw silicon, identifying each miner, processor, and logistics provider. Each supply chain actor should be required to upload verified data to a shared blockchain ledger, including extraction site coordinates, batch numbers, transport records, and processing data. The blockchain system should assign a unique digital token to each silicon batch, enabling unbroken traceability from mine to finished semiconductor.
Implementing such a system requires a collaborative approach. Foundries must work closely with their raw material suppliers to ensure data accuracy and integrity. This may involve providing suppliers with digital tools or portals for recording and uploading data, as well as training on security protocols to prevent data tampering. In parallel, foundries should develop internal procedures for auditing blockchain records, reconciling them with physical documentation, and reporting anomalies. Regular reviews of blockchain data should be integrated into broader supply chain risk management frameworks, ensuring that any inconsistencies are identified and resolved promptly.
Foundries adopting blockchain for silicon traceability will also need to consider interoperability with government reporting requirements and industry standards. The CHIPS Act emphasizes alignment with federal cybersecurity guidelines and supply chain integrity programs, meaning that blockchain systems should be designed to support secure data sharing with federal agencies. Open standards and APIs can facilitate this integration, enabling foundries to provide real-time or periodic reports that demonstrate compliance with sourcing, security, and sustainability mandates.
Beyond compliance, the adoption of blockchain-enabled traceability offers significant strategic advantages. It provides foundries with a powerful tool for differentiating themselves in a competitive market by demonstrating leadership in supply chain transparency and security. Customers, regulators, and investors are increasingly focused on the provenance and integrity of critical technology inputs, and a verifiable digital chain of custody can provide the assurance they seek. Moreover, blockchain traceability can streamline internal quality control processes, reduce the risk of counterfeit or substandard materials entering production, and support rapid incident response in the event of supply chain disruptions.
The CHIPS and Science Act sets the stage for a transformative era in US semiconductor manufacturing, where supply chain security is not just a regulatory obligation but a competitive imperative. By tracing raw silicon sources through USDA and USGS open datasets and integrating blockchain to authenticate wafer origins, foundries can build supply chains that are not only secure and resilient but also transparent and trusted. In doing so, they will help ensure that US semiconductor production remains at the forefront of technological innovation while upholding the highest standards of integrity and accountability.