The bipartisan Chips and Science Act (also known as CHIPS+) became law last August. The act invests $280 billion over 10 years to bolster the U.S. semiconductor supply chain and promote research and development of advanced technologies in the United States. Since enactment, industry stakeholders have been wondering when the billions of dollars in funding opportunities (incentives, grants, and loan guarantees) will start to flow. It’s expected to start this month, so interested parties should prepare by reviewing the law and registering at SAM.gov.
First, a quick review of what’s in the law is in order. CHIPS+ authorizations include:
Manufacturing incentives worth $39 billion to build, expand, or modernize domestic facilities and equipment for semiconductor fabrication, assembly, testing, advanced packaging, or research and development, including $2 billion specifically for mature semiconductors. Within the incentive program, up to $6 billion may be used for the cost of direct loans and loan guarantees.
R&D investments of $11 billion (Manufacturing USA, National Semiconductor Technology Center, National Advanced Packaging Manufacturing Program, metrology research) and $2.2 billion in workforce development, the majority of which is focused on highly skilled jobs.
An advanced manufacturing investment tax credit of 25% for investments in semiconductor manufacturing. The credit covers both manufacturing equipment as well as the construction of semiconductor manufacturing facilities. It also includes incentives for the manufacturing of the specialized tooling equipment required in the semiconductor manufacturing process.
Funding Eligibility Requirements
The CHIPS implementation strategy outlines initiatives, goals, and guardrails guiding the CHIPS for America Fund to be created under the new law, which includes funding eligibility requirements.
To be eligible an applicant must be a covered entity, which is defined as: “A private entity, a nonprofit entity, a consortium of private entities, or a consortium of nonprofit, public, and private entities with a demonstrated ability to substantially finance, construct, expand, or modernize a facility relating to fabrication, assembly, testing, advanced packaging, production, or research and development of semiconductors, materials used to manufacture semiconductors, or semiconductor manufacturing equipment.”
Domestic companies and foreign companies, except those that are considered a foreign entity of concern, that seek to use CHIPS funding for qualifying investments in the United States can be eligible.
A “foreign entity of concern” is, among other things, a foreign entity that is “owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country that is a covered nation” (i.e., North Korea, China, Russia, and Iran).
CHIPS funding must be used for facilities built in the United States and cannot support facilities being constructed or operated abroad.
How To Apply
Funding documents, which will provide specific application guidance, will be released this month. Awards and loans will be made on a rolling basis as soon as applications can be responsibly processed, evaluated, and negotiated.
Get Ready To Apply
Prepare to apply by registering now at SAM.gov. Every registrant will receive a Unique Entry Identifier (UEI) necessary to complete an application.
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AMT will continue covering updates on CHIPS+ as they become available.