The U.S. Department of Commerce announced a new funding opportunity for semiconductor materials and manufacturing equipment. These CHIPS for America funds are for smaller supply chain projects and businesses, open to projects with a capital investment below $300 million.
As part of the CHIPS and Science Act, these incentives are focused on strengthening supply chains and support smaller projects and businesses.
The CHIPS and Science Act of 2022 provides $52.7 billion for American semiconductor research, development, manufacturing and workforce development. This includes $39 billion in manufacturing incentives, including $2 billion for the legacy chips used in automobiles and defense systems, $13.2 billion in R&D and workforce development, and $500 million to provide for international information communications technology security and semiconductor supply chain activities. It also provides a 25 percent investment tax credit for capital expenses for manufacturing of semiconductors and related equipment.
The new funding opportunity builds upon the Commerce Department’s announcement in June to expand funding to larger supply chain projects (above $300 million). Projects will involve the construction, expansion or modernization of commercial facilities in the United States for semiconductor materials and manufacturing equipment.
These projects will produce the equipment, chemicals, gases and other materials that are critical to manufacturing semiconductors in America. The Department of Commerce encourages suppliers to apply for CHIPS incentives alongside other institutions from their regions to expand economic opportunity and competitiveness.
The investments have three strategic objectives:
• strengthen supply chain resilience
• advance U.S. technology leadership
• support vibrant U.S. fab clusters with a reliable ecosystem of suppliers.
“The CHIPS and Science Act, a key piece of President Biden’s Investing in America agenda, provides our country the opportunity to strengthen domestic supply chains, create good jobs, protect our national security, and support long-term U.S. economic growth,” said Secretary of Commerce Gina Raimondo. “CHIPS for America is laser-focused on ensuring both our economic and national security by making smart investments up and down semiconductor supply chains that enable smaller suppliers and more American workers to help grow the U.S. semiconductor industry.”
This new funding opportunity features an application process designed to be accessible for smaller businesses and projects. The application process includes two phases:
• Concept Plan: Applicants submit a concept plan describing how their proposed project addresses core strategic objectives, including U.S. economic and national security. Concept plans will be accepted between December 1, 2023, and February 1, 2024.
• Full Application: The Department of Commerce will review submitted concept plans and invite the most promising applicants that demonstrate how they advance program priorities to submit a full application for CHIPS incentives. The full application submission dates will be communicated to applicants individually upon notifying them of their advancement.
This funding opportunity follows through on the CHIPS and Science Act’s requirement that the Department establish a program to incentivize investment in the construction, expansion, or modernization of commercial facilities in the U.S. for the semiconductor supply chain, including materials and manufacturing equipment.
Since announcing the first funding opportunity in February, the Department of Commerce has received more than 500 statements of interest and more than 100 pre- and full applications from companies seeking to build semiconductor projects across 42 states.
