CHIPS…and Some Surprising Dips: CHIPS for America Funding Announced
The U.S. Department of Commerce’s National Institute of Standards and Technology issued the much-anticipated Phase I CHIPS for America funding guidance on Tuesday, February 28. While there is great opportunity for funding, there were some surprises as well.
The first CHIPS funds provide manufacturing incentives to reestablish an American semiconductor manufacturing industry, in an effort to dramatically curtail dependence on China for a predictable semiconductor supply chain. This initiative is a strong economic driver, but perhaps more important, it is a national security imperative. As part of the bipartisan CHIPS and Science Act, the Department of Commerce is overseeing $50 billion to revitalize the U.S. semiconductor industry, including $39 billion in semiconductor incentives.
Who and What Is Eligible for Phase I Funding
The Phase I wave of funding will go toward projects to construct, expand, or modernize commercial facilities for the production of leading-edge, current-generation, and mature-node semiconductors. This includes both front-end wafer fabrication and back-end packaging.
What Are Some of the Details and Surprises
Some of the surprises include the fact that awards will generally not exceed 15% of project costs. Another 20% may come from government backed loans. So, businesses will have to provide at least 65% of total project costs.
The application is complex, approximately 130 pages, with significant peripheral policy demands on applicants, including the provision of childcare services, substantial workforce training and affirmative action efforts, excess profit sharing, no stock buybacks and commitments to fund separate Research and Development efforts.
According to Secretary of Commerce Gina M. Raimondo, “when we have finished implementing CHIPS for America, we will be the premier destination in the world where new leading-edge chip architectures can be invented in our research labs, designed for every end-use application, manufactured at scale and packaged with the most advanced technologies.”
Awards will take the form of direct funding, federal loans, and/or federal guarantees of third-party loans. Awards are designed to complement—not replace—private investment and other sources of funding, and applicants are strongly encouraged to bring capital to the table.
What About Phase II and III Funding Opportunities
The Department will also release a funding opportunity for semiconductor materials and equipment facilities in the late spring, and one for research and development facilities in the fall.
Deadlines To Keep In Mind
| Statements of Interest (SOI) | All potential applicants may submit on a rolling basis, beginning today, Tuesday, February 28, 2023. | Statements of Interest are required and must be submitted at least 21 days prior to submitting a pre application or full application. |
| Funding applications for “leading edge facilities” | Pre-applications (which are optional) and full applications will be accepted on a rolling basis beginning Friday, March 31, 2023. | |
| Funding applications for “current generation, mature node, and back-end production facilities” | Pre-applications (which are recommended) and full applications will be accepted on a rolling basis beginning on May 1, 2023 and full applications will be accepted beginning on June 26, 2023. | |
| Funding applications for “semiconductor R&D facilities” | Pre-applications and applications at a date to be determined. |
Buchanan' government relations advisors have extensive experience helping clients leverage government funding opportunities and stand ready to help manufacturing clients navigate the application process.