CHIPS and Science Act

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 sfogarty@gpec.org for assistance.

This page will be updated as more guidelines are released.

Updates:

(Sept. 29): The DOC released the funding opportunity for smaller supply chain projects and businesses. Get details in the application process section of this webpage.

(June 27): Updated to include information about the second notice of funding addressing suppliers. Read more in the application process section.

(June 22): Semiconductor investment map added.

(May 3): Two GPEC-hosted panels featuring Snell & Wilmer and Spencer Fane, LLC provided information about the CHIPS Act. Watch or read the recap about funding opportunities and the application process here and one about the pre-application process here.

(March 27): NIST released detailed instructions and guidelines for the pre-application and application processes. Go to application process for more information and resources.

(March 21): Dept. of Commerce released a Notice of Proposed Rulemaking to outline security guardrails ensuring technological and national security. Find the outline at NIST and the full guidelines document here.

The Department is seeking public comment on the Notice of Proposed Rulemaking and will accept comment for 60 days. Industry, partners and allies, and other interested parties are encouraged to submit comment to inform the final rule to be published later this year.

(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 Act at a Glance

$52.7 billion in federal funding has been committed to the advancement of semiconductor manufacturing, supply chain, R&D and workforce.

Many international companies operating in the U.S. are eligible, but funding must be used domestically.

A notice of funding opportunity for semiconductor production facilities was released on Feb. 28. Two more funding opportunities are expected later in the year.

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. Explore Greater Phoenix’s semiconductor industry competitiveness compared to other states with this interactive map on the White House site.

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 sfogarty@gpec.org.

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.

The first funding round and the large-scale projects of the second funding round follow the same five-step application process:

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. A detailed pre-application guide can be found here. Visit this page for templates and examples.
Full Application: Provide detailed information on the project(s), including the technical and financial feasibility and alignment with economic and national security objectives. Application model guidelines can be found here, while other instructions and an example can be found here.
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.

Apply 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.

Full applications are accepted on a rolling basis as of June 26.

Find more information here:

Second funding round: Supply chain projects

The second funding round is broken into two parts: one for larger-scale materials and manufacturing equipment, and the other for smaller projects. Applicants are encouraged to explain how their project would strengthening supply chain resilience, advance U.S. technology leadership, and support fab clusters in the country. Find more details here.

Large-scale supply chain projects

Applicants seeking to construct, expand or modernize materials or manufacturing equipment facilities with a capital investment of at least $300 million. Pre-applications may be submitted as of Sept. 1 and full applications on Oct. 23.

NIST stated that applications that address economic and national security objectives will be judged more favorably, but also stressed that considerations including commercial viability, financial strength, project technical feasibility and readiness, workforce development and broader impacts will be evaluated as well.

Find more information here.

Smaller-scale supply chain projects

Applicants seeking to construct, expand or modernize materials or manufacturing equipment facilities with a capital investment under $300 million. These projects will produce the equipment, chemicals, gases and other materials used in semiconductor manufacturing. The application process for this NOFO, announced Sept. 29, is different than the other two:

Step 1: Concept Plan: Describe how the proposed project addresses core strategic objectives, including economic and national security goals. These will be accepted from Dec. 1, 2023 to Feb. 1, 2024.
Step 2: Full Application: The DOC will review concept plans and invite the most promising applicants to continue to the full application using the same guidelines as the other NOFOs. Submission dates will be provided by the DOC directly to applicants approved for this step.

The Dept. of Commerce recommended that projects working to support fab clusters apply as part of a consortium. These consortiums may include supplier facilities, state or local government entities, an anchor institution such as a semiconductor fab, workforce providers, higher education institutes, industry organizations or other relevant entities. Find supply chain information here.

Find more information about the smaller-scale supply chain project here.

For general inquiries about the second NOFO, email askchips@chips.gov.

Upcoming Notice of Funding Opportunity (NOFO) Schedule:

Early fall: NOFO for construction of semiconductor R&D facilities

Awards and loans will be made on a rolling basis.

Additional documents can be found in the resources section of this webpage.

CHIPS Act resources

Entities seeking advice, consultants, or legal services can email sfogarty@gpec.org to be connected to further guidance.

Find more information on the CHIPS Act at:

Additional resources to support your funding application:

Key resources for Pre-Application and Application processes: