CHIPS Incentives Award to Korea Zinc: What It Means

The CHIPS incentives award announced by the United States marks a significant step in reshaping global technology supply chains. This latest funding decision supports a subsidiary of Korea Zinc in building an advanced US-based facility to process critical minerals. These minerals are essential for semiconductors and modern electronics, so securing a domestic supply is more than symbolic it is strategic.

This move fits squarely within the broader goals of the CHIPS and Science Act, which aims to reduce reliance on overseas supply chains and strengthen national resilience. Let me walk you through why this development matters and how it could affect both the US and the UK technology landscapes.

Understanding the CHIPS Incentives Award and Its Purpose

To understand the importance of this CHIPS incentives award, it helps to look at the basics. On December 15, 2025, the US Department of Commerce, through the National Institute of Standards and Technology (NIST), confirmed a $210 million direct funding award to Crucible Metals, LLC, a subsidiary of Korea Zinc.

The funding supports the construction of a large-scale smelter and processing facility in Clarksville, Tennessee. While the total project cost is estimated at around $7.4 billion, this award provides a crucial early push that makes the investment viable.

Korea Zinc is not new to this space. It operates the world’s largest non-ferrous metal smelter in Onsan, South Korea, and brings decades of operational expertise. The Tennessee facility will replicate this proven industrial model, but with a focus on serving US and allied technology markets.

For official confirmation and program details, you can refer to the
 NIST CHIPS Program announcement.

CHIPS Incentives Award Project: Key Details and Timeline

The CHIPS incentives award supports a facility designed to process minerals that are critical for semiconductor manufacturing and advanced electronics. The plant is expected to begin operations in 2029, with a planned annual output of approximately 540,000 tons.

The minerals produced will include:

• Gallium and germanium for compound semiconductors

• Indium and antimony used in advanced chips and displays

• Bismuth, tellurium, and cadmium

• Precious metals such as palladium, copper, silver, and gold

• Zinc and lead

• Sulfuric acid, including semiconductor-grade variants

These materials are foundational to silicon and compound semiconductor devices. Any disruption in supply can quickly ripple through industries such as AI, electric vehicles, aerospace, and defence.

An additional element of the agreement strengthens short-term resilience. Beginning in 2026, Korea Zinc will prioritise US customers by allocating production from its South Korean smelter for ten key minerals until the Tennessee facility becomes operational.

Why the CHIPS Incentives Award Matters for Technology Supply Chains

The real importance of this CHIPS incentives award lies in how it reduces risk. Many critical minerals are currently sourced from a limited number of countries, creating geopolitical and economic vulnerabilities.

Semiconductors underpin everything from smartphones and cloud computing to quantum research and autonomous vehicles. Shortages of minerals like gallium or indium can stall innovation and inflate costs across entire sectors.

US officials see this project as a direct response to those risks. According to Bill Frauenhofer, Director of the CHIPS Program Office, the investment helps remove potential supply chain chokepoints for American manufacturers.

Beyond technology, the project is expected to generate skilled jobs in Tennessee and support broader national security objectives. In today’s climate, reshoring this type of strategic industrial capacity is increasingly viewed as essential rather than optional.

For more insight into semiconductor supply resilience, you may also find value in this overview from Semiconductor Industry Association.

UK Perspective on the CHIPS Incentives Award Strategy

From a UK standpoint, the CHIPS incentives award highlights a clear contrast in policy approach. The US is using large-scale industrial subsidies, while the UK’s National Semiconductor Strategy, launched in 2023 with £1 billion in funding, focuses on different strengths.

The UK strategy prioritises:

• Research and development

• Chip design and intellectual property

• Compound semiconductors, where the UK is a global leader

Rather than competing directly on mass manufacturing, the UK builds on its universities and innovation clusters in regions such as South Wales and the North East.

On critical minerals, the UK refreshed its Critical Minerals Strategy in November 2025 under “Vision 2035.” The goal is to reduce dependency on any single supplier nation to no more than 60% by 2035, while emphasising ethical sourcing and international cooperation.

You can explore the full policy framework on
GOV.UK Critical Minerals Strategy.

CHIPS Incentives Award and Transatlantic Collaboration

Interestingly, this CHIPS incentives award may still benefit UK technology firms indirectly. A more stable US supply of critical minerals can help smooth global pricing and availability, reducing volatility across international markets.

Recent US-UK technology agreements already point toward closer cooperation in advanced materials, semiconductor research, and supply chain security. Sharing expertise in compound semiconductors or mineral processing could strengthen both economies without duplicating effort.

This award also reinforces the case for deeper transatlantic alignment. As supply chains become more regionalised, trusted partnerships will play a decisive role in maintaining innovation and competitiveness.

Final Thoughts on the CHIPS Incentives Award

The latest CHIPS incentives award to a Korea Zinc subsidiary is more than a funding announcement it is a signal of long-term industrial intent. By investing in domestic critical mineral processing, the US is reinforcing semiconductor resilience, national security, and technological leadership.

For the UK, it serves as both a contrast and a reminder. While our strengths lie in design, research, and compound semiconductors, secure access to materials remains vital. Strategic partnerships, rather than direct imitation, may offer the smartest path forward.

As global technology competition intensifies, initiatives like this CHIPS incentives award will likely shape who leads and who follows. The coming decade will show just how transformative these decisions turn out to be.