Overview of CHIPS and Science Act Funding for Semiconductor Manufacturing
The CHIPS Act of 2022 allocates over $52 billion for domestic semiconductor manufacturing initiatives, research and development, workforce education programs, and more. The bill includes provisions for energy security, microelectronics, and technology critical to national security, among others. Both the House and Senate have passed the bill, awaiting President Biden's signature.
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CHIPS and Science Act An overview of the CHIPS-plus bill and funding for domestic semiconductor manufacturing July 26, 2022 1
The CHIPS The CHIPS- -plus bill includes many of plus bill includes many of USICA s original priorities USICA s original priorities BACKGROUND After Congress struggled for months to send a version of China competition legislation to the president s desk, the Biden administration encouraged lawmakers to pass a smaller bill to appropriate $52B to domestic semiconductor manufacturing initiatives that were enacted without funding via the FY2021 NDAA On July 19, the Senate conducted a test vote to approve a 1,000+ page amendment that included in addition to semiconductor funding billions of dollars for various science and technology provisions considered critical to national security, many of which had been included in the stalled USICA bill the Senate passed in June 2021 Key Provisions CHIPS Act of 2022 Science & Technology Department of Energy Allocates $52.7 B to support domestic semiconductor manufacturing through financial assistance, research and development (R&D), workforce education programs, and more Authorizes $102 B over five years to the National Science Foundation (NSF), Department of Commerce (DOC), and the National Institute of Standards and Technology (NIST) Grants billions in funding to the Department of Energy (DOE) for research and programs related to energy security, microelectronics, nuclear technologies, and more Includes NASA Authorization Act Outlook The House and Senate both passed the bill, and it is now headed to President Biden s desk A date for the signing ceremony has not yet been set S O U R C E Axios, Washington Post, The Hill, Senate Committee on Commerce, Science, and Transportation, Roll Call. 2
The CHIPS Act of 2022 allocates over $52B The CHIPS Act of 2022 allocates over $52B to domestic semiconductor manufacturing to domestic semiconductor manufacturing initiatives initiatives BACKGROUND Funded Initiatives The US controlled 40% of global semiconductor manufacturing in 1990, but only 12% in 2020 Manufacturing Incentives: Provides financial assistance to semiconductor manufacturers to develop US-based facilities and materials The CHIPS Act of 2022 funds the CHIPS for America Act provisions enacted via the FY2021 NDAA for five years R&D: Supports several research programs exploring key areas of chip development, including advanced packaging and microelectronics metrics Funding Overview DOC Manufacturing Incentives $39 B Defense Fund: Established the DOD Microelectronics Commons to accelerate the inclusion of new research into manufactured products and train staff DOC R&D $11 B DOD Defense Fund $2 B International Technology Security & Innovation Fund: Expands ICT security and supports semiconductor supply chain operations DOS International Technology Security & Innovation Fund $500 M Workforce & Education Fund: Harnesses NSF work to initiate US-based semiconductor workforce development Workforce & Education Fund $200 M CHIPS for America Total $52.7 B Public Wireless Supply Chain Innovation Fund Public Wireless Supply Chain Innovation Fund: Encourages new technology developments to advance America s mobile broadband market $1.5 B CHIPS Act of 2022 Topline $54.2 B S O U R C E Senate Committee on Commerce, Science, and Transportation, CSIS. 3
The CHIPS Act also sets guidelines for The CHIPS Act also sets guidelines for incentives and establishes an investment incentives and establishes an investment tax credit tax credit Advanced Manufacturing Investment Credit Manufacturing Incentive Guidelines Establishes a 25% tax credit for investing in semiconductor manufacturing Creates clear eligibility requirements for suppliers to receive financial assistance via incentives Chip manufacturers are making plans for CHIPS Act funding Prioritizes a wide range of semiconductors and their contribution to supply chain vulnerabilities Industry giants Intel and TSMC have indicated they plan to use funding to build factories in Ohio and Arizona, and GlobalFoundries is seeking funding to expand a factory in upstate New York Minnesota s SkyWater Technology and Purdue University announced plans to use funding to support the construction of a $1.8 B factory and research facility near the Indiana- based university Reserves $2 B of incentive funding for mature semiconductors, prioritizing recipients in related critical industries The American Semiconductor Innovation Coalition, including IBM and the State University of New York at Albany, are looking for funding to build a facility dedicated to semiconductor research in Albany, NY Prohibits incentive recipients from developing manufacturing capabilities in countries that threaten US national security S O U R C E Senate Committee on Commerce, Science, and Transportation, Washington Post. 4
The CHIPS The CHIPS- -plus bill authorizes $102B for plus bill authorizes $102B for NSF, DOC, and NIST for science and NSF, DOC, and NIST for science and technology efforts technology efforts Funding Overview Key Initiatives NSF Technology Directorate $20 B NSF Directorate for Technology, Innovation, and Partnerships (TIP): Speeds up domestic development of technologies critical to economic and national security, like AI, quantum computing, 6G, and others NSF Core Activities $61 B National Science Foundation (NSF) $81 B STEM Workforce Development: Directs $13 B to NSF to fund fellowships, scholarships, and traineeships to educate and develop workers in critical fields Regional Technology Hubs $10 B RECOMPETE Pilot $1 B Department of Commerce (DOC) $11 B DOC Technology Hubs: Creates 20 regional technology hubs, distributed geographically, to support innovation, job opportunities, and technological development NIST Research $6.9 B Manufacturing USA $829 M Manufacturing Extension Partnership $2.3 B DOC RECOMPETE Pilot: Coordinates activities to support economic development in persistently distressed and underserved communities National Institute of Standards & Technology (NIST) $10 B NSF, DOC, NIST Total $102 B S O U R C E Senate Committee on Commerce, Science, and Transportation. 5
