Biden administration particulars plans for $50B in CHIPS Act funding

On Aug. 9, Joe Biden signed the CHIPS and Science Act of 2022 into law. The move marked a victory for a presidential administration badly in need of a win and the culmination of a hard-fought, month-long battle that ended with broad bipartisan support. One of the main criticisms leading up to the passage of the bill was questions about where exactly the money would go.

Today, the US Department of Commerce details some of those plans and outlines where $50 billion of that funding will go. The DoC reiterates the main goals of the legislation, noting that the money will be used to get the US back on track with domestic semiconductor production, build chip supplies and create jobs.

Of course, to be eligible for a portion of the grant, the company must produce its chips in the United States. That includes building and running these factories here. Other rules are as follows:

An eligible applicant for funding under the Section 9902 Incentive Program must be a “Covered Entity” that is a private entity, a not-for-profit entity, a consortium of private entities, or a consortium of non-profit, public and private entities with a proven track record Ability to fund, build, expand, or upgrade substantially a facility that relates to the manufacture, assembly, testing, advanced packaging, production, or research and development of semiconductors, semiconductor manufacturing materials, or semiconductor manufacturing equipment.

Specifically, $39 billion will go toward expanding domestic manufacturing, of which $28 billion will go to incentivize manufacturers to develop next-generation chips, with $10 million being focused on existing chips. Separately, $11 billion is focused on R&D programs. These include the formation of the National Semiconductor Technology Center (NSTC), which it describes as a “public-private entity.” It brings together companies, the Department of Defense, the Department of Energy and the National Science Foundation to design and prototype chips.

“The funding provided to the NSTC by the CHIPS Act of 2022 should be viewed as seed capital,” the report said. “The department envisions an organization that, over time, will become a significant force in driving innovation in semiconductor and microelectronics, with significant financial and programmatic support from corporations, universities, investors and other government agencies, including those on state and local level. ”

US Secretary of Commerce Gina Raimondo said, “Rebuilding America’s leadership in the semiconductor industry is a down payment on our future as a world leader. CHIPS for America will ensure continued US leadership in the industries that underpin our national security and economic competitiveness. Under President Biden’s leadership, we’re making things in America again, revitalizing our manufacturing industry after decades of divestment, and making the investments we need to lead the world in technology and innovation.”

Further funding documents will be published in February.

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