What companies should know about the CHIPS Act
The CHIPS And Science Act is poised to provide significant funding to semiconductor companies that operate in or plan to expand to Greater Phoenix and Arizona. Here you will find information on eligibility, rules and regulations, the application process and other resources needed to apply for a portion of the $52.7 billion federal investment.
GPEC can connect you to advisors, consultants and legal services to provide counsel and more information. Contact GPEC Vice President of International Business Development Sean Fogarty at email@example.com for assistance.
This page will be updated as more guidelines are released.
(Feb. 28): Application guidelines released for first funding round involving semiconductor production facilities. Go to application process for more info.
(Feb. 17): CHIPS leaders and staff members announced. Visit NIST page for more.
(Feb. 13): Notice of funding schedule released for three funding rounds. Go to application process for more info.
CHIPS Application Webinar
On Monday, March 13, 2023 GPEC hosted an online panel with Brett Johnson of Snell & Wilmer and Mike Patterson of Spencer Fane LLP, to share additional information on how to best navigate the application process. Topics included funding opportunities, qualification requirements, compliance requirements and the application process. A recap with additional information will be shared within the next week. Contact Sean Fogarty at firstname.lastname@example.org with any questions on the webinar.
CHIPS Act at a Glance
What is the CHIPS Act
The CHIPS and Science Act, passed in August 2022, invests $52.7 billion into the semiconductor industry in aim of revitalizing U.S. manufacturing. Semiconductor capacity in the United States has declined from 37% of worldwide output in 1990 to just 12% today, putting the country at risk of falling behind in the ecosystem.
The investment will benefit manufacturing, supply chain, national security, and research and development technology.
The CHIPS Act allocates:
- $39 billion in manufacturing incentives
- Approximately $28 billion will support large-scale investments in leading-edge logic and memory manufacturing clusters
- Approximately $10 billion will support manufacturing capacity for mature and current-generation chips, new and specialty technologies, and suppliers to the semiconductor industry.
- This includes at least $2 billion for mature technology used in automobiles and defense systems
- Up to $6 billion may be used for direct loans and loan guarantees
- $13.2 billion in R&D and workforce development
- $11 billion to establish the National Semiconductor Technology Center (NSTC), National Advanced Packaging Manufacturing Program, and other R&D and workforce development programs
- $2 billion to implement the Department of Defense’s Microelectronic Commons, an R&D and semiconductor workforce training network
- Includes $200 million toward workforce development by leveraging National Science Foundation activities
- $500 million for international information communications technology security and semiconductor supply chain activities
It also provides a 25% tax credit for investments in semiconductor manufacturing and related equipment for which construction begins between tax years 2023 and 2026.
In the accompanying Public Wireless Supply Chain Innovation program (known as ORAN), $1.5 billion is allocated to promote and deploy wireless technologies that use open and interoperable radio access networks.
More information can be found on the White House website.
Find a section-by-section summary on the U.S. Dept. of Commerce website.
Greater Phoenix’s semiconductor position
After commitments of $20 billion from Intel and $40 billion from Taiwan Semiconductor Manufacturing Company in the last two years, Arizona is positioned to become a national hub for the semiconductor industry. Suppliers are flocking to the region to support the industrial giants.
Semiconductor companies currently operating in or considering expansion to Arizona and Greater Phoenix can take advantage of the CHIPS Act to further grow in the local operating environment.
Click here to learn more about Greater Phoenix’s semiconductor ecosystem.
Is my company eligible for the CHIPS Act?
CHIPS Act funding will facilitate the creation of semiconductor clusters that includes manufacturing facilities, suppliers, research, workforce programs and its supporting infrastructure. Framework for non-manufacturing funding will be added as federal guidelines are released.
Eligibility requirements include:
- Must be a “covered entity,” defined as:
- A private entity, a nonprofit entity, a consortium of private entities, or a consortium of nonprofit, public, and private entities with a demonstrated ability to substantially finance, construct, expand, or modernize a facility relating to fabrication, assembly, testing, advanced packaging, production, or research and development of semiconductors, materials used to manufacture semiconductors, or semiconductor manufacturing equipment
- CHIPS funds must be used for resources and facilities built in the United States
- International companies are eligible, with the exception of a “foreign entity of concern” that is under the jurisdiction or direction of a government classified as a covered nation (China, Iran, North Korea, Russia)
- Funding must be used domestically. The CHIPS Act will not support facilities being constructed or operated abroad
- Successful applicants must have taken “meaningful steps” toward developing or expanding new manufacturing facilities in the U.S., which include:
- Receiving financial incentives from local or state economic development agencies
- Partner with local high schools, community colleges and/or universities to support workforce development
Applicants are encouraged to form collaborations with suppliers, customers, investors, state, local or tribal governments, or other relevant entities.
This page will be updated as more guidelines are released.
More information can be found in the U.S. Dept. of Commerce’s Implementation Strategy.
For more information on incentives, contact email@example.com.
How do I apply for CHIPS Act funding?
The first guidelines to apply for CHIPS funding were released Feb. 28, with two more announcements expected in the late spring and early fall. Subscribe to the mailing list of the Dept. of Commerce to receive updates and check back here after the guidelines are released for more.
Applicants must address six program priority areas: economic and national security, commercial viability, financial strength, project technical feasibility and readiness, workforce development, and broader impacts. Each is described in detail here.
First funding round: Semiconductor production facilities
The first funding opportunity seeks applications for 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.
To apply, visit the CHIPS application page and click on the “log in” button in the top right corner to register.
Five-part application process:
- Statement of Interest: Briefly describe the proposed project.
- Pre-Application (Optional): Submit a more detailed description, and the CHIPS Program Office will provide feedback and a recommendation for next steps.
- Full Application: Provide detailed information on the project(s), including the technical and financial feasibility and alignment with economic and national security objectives.
- Due Diligence: If the project is reasonably likely to receive an award, the project will enter a due diligence phase with the CHIPS Program Office in which the applicant provides additional national security, financial and environmental information, among other topics.
- Award Preparation and Issuance: The Department of Commerce will prepare and issue an award. Direct funding and loans will be disbursed in tranches tied to project milestones.
Due dates for each step differ based on production type.
- All statements of interest will be accepted on a rolling basis beginning Feb. 28.
- Leading-edge facilities: Pre-applications and full-applications will be accepted on a rolling basis beginning March 31.
- Current-generation, mature-node, and back-end production facilities: Pre-applications will be accepted on a rolling basis beginning May 1, and full applications will be accepted on a rolling basis beginning June 26.
Find more information here:
- Application process and evaluation fact sheet
- NIST landing page with additional resources
- Vision for Success sheet
Additional resources can be found at the bottom of this webpage.
Upcoming Notice of Funding Opportunity (NOFO) Schedule:
- Late spring: NOFO for material suppliers and equipment manufacturers
- Early fall: NOFO for construction of semiconductor R&D facilities
Awards and loans will be made on a rolling basis.
CHIPS Act resources
Entities seeking advice, consultants, or legal services can email firstname.lastname@example.org to be connected to further guidance.
Find more information on the CHIPS Act at:
- National Institute of Standards and Technology (NIST)
- NIST Webinars
- U.S. Dept. of Commerce
- U.S. Dept. of Commerce’s Implementation Strategy
- White House
- NIST FAQ page
- Upcoming webinars hosted by NIST
Additional resources to support your funding application: