On August 9 Joe Biden signs the CHIPS and Science Act of 2022. The move marks a victory for a presidential administration in dire need of a victory and the culmination of a hard-fought, months-long battle that ended with broad bipartisan support. Among the main criticisms leading up to the bill’s passage were questions about exactly where the money would go.
Today, the US Department of Commerce is describing some of these plans, outlining where $50 billion of that funding will go. Reiterating the key goals of the legislation, the DoC noted that the money would go toward getting the U.S. back on track with domestic semiconductor manufacturing, building back-up chip stocks and creating jobs.
To be eligible for some of the funding, the company must – of course – manufacture its chips in the States. This includes building and operating these factories here. More rules are as follows:
An eligible applicant for funding under the Section 9902 stimulus program must be a “covered entity,” which may be a private entity, a nonprofit entity, a consortium of private entities, or a consortium of nonprofit entities, public and private legal entities with a demonstrated ability to significantly finance, construct, expand, or modernize a facility related to the manufacturing, assembly, testing, advanced packaging, manufacturing, or research and development of semiconductors, semiconductor manufacturing materials, or semiconductor manufacturing equipment semiconductors.
Specifically, $39 billion will go to build domestic manufacturing, $28 billion of which will come as incentives for manufacturers to design next-generation chips, with $10 million focused on existing chips. Separately, $11 billion is directed toward research and development programs. This includes the creation of the National Semiconductor Technology Center (NSTC), which is described 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.
“Funding provided by the CHIPS Act of 2022 for NSTC should be viewed as seed capital,” the report noted. “The Department envisions an organization that grows over time to be a significant force for advancing semiconductor and microelectronics innovation, with significant financial and programmatic support from companies, universities, investors and other government agencies, including those at the state and local levels.” “
US Commerce Secretary Gina Raimondo says, “Restoring America’s leadership in the semiconductor industry is a down payment on our future as a global leader. CHIPS for America will ensure continued U.S. leadership in the industries that underpin our national security and economic competitiveness. Under President Biden’s leadership, we are making things happen in America again, revitalizing our manufacturing industry after decades of disinvestment, and making the investments we need to lead the world in technology and innovation.”
Additional funding documents will be published in February.