First funding opportunity for CHIPS Act announced

The Biden administration this week took a significant step in its efforts to catalyze expansion and modernization of the U. S. semiconductor industry, with the announcement of how it will begin to deploy $50 billion of funding under the CHIPS and Science Act, with $39 billion of the funding intended for incentives for the construction, expansion, or modernization of commercial facilities for the front- and back-end fabrication of leading-edge, current-generation, and mature-node semiconductors, all with a goal of returning semiconductor manufacturing to the U.S.

In a statement last week, Commerce Secretary Gina Raimondo emphasized that the incentives are designed to spur private investment, leveraging the federal dollars by at least a 10:1 ratio, so applicants are strongly encouraged “to bring capital to the table.”

This week, Commerce released the funding opportunity and a series of factsheets detailing the funding. These awards may be provided as direct funding, federal loans, or federal loan guarantees. A number of requirements are placed on awardees, including provision of affordable child care, financial transparency, environmental compliance, workforce development plans, and a restriction of R&D and licensing in foreign countries, particularly China. Companies receiving more than $150 million will be required to share a portion of profits with the government if project returns are greater than expected.

The application process begins with mandatory statements of interest from all potential applicants. These are being accepted on a rolling basis. Applicants seeking funding for leading-edge facilities may submit pre-applications, and full applications will be accepted on a rolling basis beginning March 31, 2023. For potential applications for current-generation, mature-node, and back-end production facilities, pre-applications (recommended) will be accepted on a rolling basis beginning May 1, 2023, and full applications will be accepted on a rolling basis beginning June 26, 2023.

Regarding the $11 billion in CHIPS Act funding intended to foster a strong semiconductor R&D infrastructure, Raimondo's statement made clear that the National Semiconductor Technology Center (NSTC) described in the CHIPS and Science Act will be a network of several centers around the country. The NSTC is envisioned as a public-private partnership involving entities from across the spectrum of the semiconductor industry — government, private sector, universities, vendors, entrepreneurs, and investors — working together to innovate and solve problems. Press reports indicate the $11 billion will be distributed later this year.