CHIPS AND SCIENCE ACT: Implementation Resources
As Governors look to implement and support myriad provisions in the CHIPS and Science Act, this resource page provides a one-stop-shop for Governors and their advisors. Along with resources prepared by the National Governors Association on the bipartisan Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA), this CHIPS resource page aims to support Governors and their advisors as they look to leverage various federal, state, and private sector funding opportunities to achieve their goals.
The $280 billion bipartisan Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022 was signed into law by the President on August 9, 2022. The law focuses on federal aid to encourage the construction of microprocessor manufacturing facilities in the United States, and provides subsidies to manufacture semiconductors in the U.S., boost science and technology research, address China’s anti-competitive trade practices and promote STEM education and workforce development.
- The CHIPS and Science Act of 2022 was signed by the President on August 9, 2022.
- CHIPS and Science Act of 2022 Section-by-Section Summary
- The 2023 Omnibus Appropriations Bill appropriated $1.8 billion in funding for the CHIPS and Science Act, including $500m for Regional Innovation Technology Hubs, $200m for Recompete Pilot, $188m for the manufacturing Extension Partnership, $51m for Manufacturing USA and additional resources for NSF, DOE Office of Science and NIST. For additional information on Department of Commerce’s FY2023 allocations, please see Federal Funds Information for States (FFIS) analysis here (password protected for member states and territories)
- Congressional Research Service, Semiconductors: U.S. Industry, Global Competition, and Federal Policy, October 26, 2020.
White House Resources
- White House Fact Sheet on the CHIPS & Science Act, August 9, 2022.
- White House Executive Order on the Implementation of the CHIPS and Science Act, August 25, 2022 – Creates a CHIPS Implementation Steering Council.
- Report to the President: Revitalizing the U.S. Semiconductor Ecosystem, Recommendations from the President’s Council of Advisors on Science & Technology, September 20, 2022.
- Biden-Harris Administration Announces CHIPS for America Leadership, The White House, September 20, 2022.
U.S. Department of Commerce Resources
The U.S. Department of Commerce has been tasked to oversee the $50 billion CHIPS for America Fund. This provides $39 billion in appropriated funds for a semiconductor manufacturing incentives program over 5 years and $11 billion in appropriated funds over 5 years for R&D and workforce measures. These measures complement Treasury’s 25% semiconductor manufacturing investment tax credit which has an estimated cost of $24 billion.
On February 28, 2023, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) launched the first CHIPS for America Notice of Funding Opportunity (NOFO) for manufacturing incentives for commercial fabrication facilities. As part of the bipartisan CHIPS and Science Act, Commerce is overseeing $50 billion to revitalize the U.S. semiconductor industry, including $39 billion in semiconductor incentives. The first funding opportunity seeks applications for projects to construct, expand, or modernize commercial facilities to produce leading-edge, current-generation and mature-node semiconductors. This includes both front-end fabrication and back-end packaging.
Statements of Interest from all potential applicants will be accepted on a rolling basis from February 28, 2023. For potential applications for leading-edge facilities, pre-applications (which are optional) and full applications will be accepted on a rolling basis from March 31, 2023. For potential applications for current-generation, mature-mode, and back-end production facilities, pre-applications (which are recommended) will be accepted on a rolling basis from May 1, 2023, and full applications will be accepted on a rolling basis from June 26, 2023. The department will also be releasing a funding opportunity for semiconductor materials and equipment facilities in the late spring, and one for research and development facilities in the fall. 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. For further information, please see the press release, Fact Sheet and NOFO.
CHIPS.gov – Webpage of the new Chips for America office at the U.S. Department of Commerce (Commerce), which is housed at DOC’s National Institute of Standards & Technology (NIST). NIST was selected as the bureau to house the new office and programs because of its deep technical expertise, industry focus, experience with public-private partnerships, and strong administrative functions.
The Commerce implementation strategy for the CHIPS & Science Act, includes a link to the full paper, Chips for America: A Strategy for the Chips for America Fund, September 6, 2022, and an Executive summary. The CHIPS for America Fund will support 3 initiatives:
- Large scale investments in leading edge manufacturing: The CHIPS incentives program will target around $28 billion to establish domestic production of leading-edge logic and memory chips that require sophisticated manufacturing processes. Those amounts may be available for grants or cooperative agreements, or to subsidize loans or loan guarantees. The Department will seek proposals for the construction or expansion of manufacturing facilities to fabricate, package, assemble, and test critical components.
- New manufacturing capacity for mature and current-generation chips, new and specialty technologies, and semiconductor suppliers: The CHIPS incentives program will increase domestic production of semiconductors across a range of nodes. This initiative is broad and flexible, encouraging industry participants to craft creative proposals. The Department expects dozens of awards with the total value expected to be approximately $10 billion. Those amounts may be available for grants or cooperative agreements, or to subsidize loans or loan guarantees.
- Initiatives to strengthen U.S. leadership in R&D: The CHIPS R&D program will invest $11 billion in: a National Semiconductor Technology Center (see next bullet); a National Advanced Packaging Manufacturing Program; up to three new Manufacturing USA Institutes; and in NIST metrology R&D. Executing this vision will require collaboration with academia, industry, and allied countries.
The National Semiconductor Technology Center (NSTC) Public-Private Consortium: NSTC Update to the Community
- Discusses the NSTC Mission, Structure, and Definition Process.
- White Paper to be released in the first quarter of 2023 and the Department will issue guidance on when to expect Requests for Proposals.
Requests for Information to date:
- 2021 Semiconductor Supply Chain Request for Information results reported in Commerce blog post, January 25, 2022.
- 2022 Requests for Information:
- –Request for information to inform the planning and design of potential programs: 1) Incentivize investment in semiconductor manufacturing facilities and ecosystems; 2) Provide for shared infrastructure to accelerate research and development (R&D) and prototyping; and 3) Support research on advanced packaging and metrology to ensure a robust domestic semiconductor industry. (Closed March 25, 2022).
- -Request for Information on Incentives, Infrastructure and R&D needs to Support a Strong Domestic Semiconductor Industry: NIST sought public input on the design and implementation of incentive programs, including grants, loans and loan guarantees to encourage investment in domestic manufacturing capacity and reduce reliance on foreign supply chains. (Closed November 14, 2022).
- –Manufacturing USA Semiconductor Institutes Request for Information: NIST sought public input on the development of up to 3 new Manufacturing USA institutes to enhance U.S. leadership in semiconductor manufacturing. Manufacturing USA is a network of institutes that brings together people, ideas and technology to solve advanced manufacturing challenges. The institutes envisioned in the CHIPS Act will be public-private collaborations focused on technology, supply chain, and education and workforce development. (Closed November 28, 2022).
The CHIPS for America Fund will include Congressionally-mandated guardrails to protect taxpayers: To help inform its work, the Administration established 6 guiding principles as the Commerce Department began the preliminary phases of CHIPS program design. These include:
- meeting US economic and national security needs and not investing the technology in countries of concern;
- ensuring long-term leadership in the sector;
- strengthening and expanding regional clusters;
- catalyzing private sector investment;
- generating benefits for large set of stakeholders and communities, including socially and economically disadvantaged businesses (SEDI); and
- protecting taxpayer dollars to ensure taxpayer funds are protected and spent wisely, and not used for dividends, stock buybacks, or windfall profits.
Also, Davis-Bacon requirements will apply to CHIPS-funded construction projects, which ensures workers earn local prevailing wages.
Commerce Industrial Advisory Committee (IAC) – Features the Committee Members, IAC Charter, FAQs, Federal Register notice, and meetings.
High-Level Timeline of Commerce’s CHIPS & Science Act activities
- Summer 2022
- -CHIPS & Science Act of 2022 Passed into Law and Signed by President Biden
- -CHIPS for America is Launched with EO on the Implementation of CHIPS and Science Act of 2022
- Fall 2022
- -A Strategy for the CHIPS for America Fund Released
- -CHIPS Webinars and Briefings
- -CHIPS Program Office (CPO) and CHIPS R&D Office are founded, senior leadership announced
- -IAC Members Announced
- Winter 2023
- -Funding Application Process Released; Rolling Applications Begin
- Spring 2023, Summer 2023, Fall 2023, Winter 2024
- -Review, Due Diligence & Funding
- Additional Commerce resources, to-date, for stakeholders.
- Links to Commerce CHIPS News & Releases– dating back to mid-2021.
U.S. Economic Development Administration Resources
The CHIPS and Science Act authorizes $11 billion over 6 years to the U.S. Economic Development Administration within the Department of Commerce. The Act provides $10 billion to create 20 geographically distributed “regional technology and innovation hubs” in areas that are not leading technology centers. The Act also authorizes $1 billion as part of establishing the “Recompete Pilot Program” to support persistently distressed communities.
The U.S. Economic Development Administration (EDA) issued a Tech Hubs Request for Information (RFI) to solicit public input about the program design, structure, and evaluation of the Tech Hubs program. The Tech Hubs program was enacted as part of the CHIPS and Science Act of 2022, and Congress appropriated $500 million for FY 2023. Through this RFI, EDA seeks input in several areas, including but not limited to information on: structuring a Tech Hubs program that will accelerate regions evolution into a global leader in an industry of the future that strengthens the region and U.S. economic and national security; identifying metrics for assessment of successful Tech Hubs; designing a competitive, inclusive and accessible selection process for Tech Hub designations that would both support critical technology and innovation sectors, as well as geographic diversity; and identifying how federal designations and federal grants can be structured to maximize the desired impacts of the Tech Hubs program. While this RFI specifically seeks input on these and other topics, EDA welcomes all responses that stakeholders believe will support the development of a strong Tech Hubs program. Responses are due by March 16. For more information, see the press release and the RFI.
The U.S. EDA has created a Regional Technology and Innovation Hubs (Tech Hubs) webpage. This provides a link to resources, funding opportunities, requests for information and other updates.
On February 23, 2023, the EDA released a Request for Information on the Distressed Area Recompete Pilot Program. The Recompete program will invest in distressed communities across the country to create and connect workers to jobs. The Recompete program specifically targets areas with low labor participation, particularly by those considered in the prime ages for sustained employment (ages 25-54) – otherwise known as an area with a high prime-age employment gap – and strives to make targeted interventions to spur economic activity in such areas. Congress appropriated $200 million for the Recompete Pilot Program for FY 2023. The Request for Information can be found here.
On December 14, 2022, the Hon. Alejandra Castillo, U.S. Assistant Secretary of Commerce for Economic Development, U.S. Economic Development Administration presented to the United States House of Representatives Committee on Science, Space and Technology on the EDA’s regional innovation programs and place-based economic development strategies. Please see the transcript here.
National Science Foundation Resources
The CHIPS and Science Act authorizes $81 billion for the National Science Foundation over five years, including for PreK-12, undergraduate and graduate STEM education, workforce measures and scientific research. The NSF has also been appropriated $200 million for CHIPS for American Workforce & Education Fund to kick start development of the domestic semiconductor workforce, which faces near-term labor shortages.
U.S. Department of Energy Resources
The CHIPS and Science Act authorizes $67 billion in the Department of Energy, including a $50 billion authorization for DOE’s Office of Science to enable cutting-edge research and development in clean energy and advanced computing and manufacturing.
U.S. Department of Defense Resources
The CHIPS and Science Act appropriates $2 billion to the Department of Defense to fund microelectronics research, fabrication, and workforce development.
The Department may provide funding in various forms, including grants, cooperative agreements, other transactions, loans, and loan guarantees.
- CHIPS Act Advances DOD’s Emphasis on Microelectronics, August 10, 2022.
U.S. Department of Treasury Resources
Section 48D of the CHIPS and Science Act establishes a new advanced manufacturing investment tax credit (ITC). This creates a 25% ITC for investments in semiconductor manufacturing facilities and equipment.
- February 28, 2023 and onwards – Statements of Interest from potential applicants will be accepted on a rolling basis for the CHIPS Incentive Program – Commercial Fabrication Facilities
- March 27, 2023 – Comments due in response to Request for Information for EDA’s Distressed Area Recompete Pilot Program
- March 31, 2023 – For potential applications for leading-edge facilities, optional pre-applications and full applications will be accepted on a rolling basis for the CHIPS Incentive Program – Commercial Fabrication Facilities
NGA Communications, Publications, and Commentary
- Workforce Development In The IIJA, CHIPS And IRA
- Understanding The State And Territory Role In Implementing The CHIPS For America Fund
- The CHIPS and Science Act of 2022 – NGA Summary, August 22, 2022
- July 28, 2022 Statement by NGA Chair New Jersey Governor Phil Murphy and NGA Vice Chair Utah Governor Spencer Cox applauding passage of the bipartisan CHIPS legislation by the House and Senate.
- March 30, 2022, Statement by NGA Chairman Asa Hutchinson and Vice Chairman Phil Murphy of New Jersey regarding supply chain legislation.
- February 24, 2022, letter to Congressional leadership from bipartisan group of 22 Governors, led by Michigan Governor Gretchen Whitmer and Indiana Governor Eric Holcomb, urging quick passage of economic competitiveness legislation.
Meet the Team
- Rachael Stephens Parker, Program Director, Workforce Development and Economic Policy
- Tom Curtin, Program Director, Infrastructure
- Richard Lukas, Legislative Director
- Sally Rood, Senior Policy Analyst
- Glenn Grimshaw, Senior Policy Analyst
Slides from NGA CHIPS Briefing on Commercial Fabrication Facilities Funding, March 15, 2023
On March 15, NGA hosted a briefing for Governors’ offices with the U.S. Department of Commerce’s CHIP Program Office. On February 28, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) launched the first CHIPS for America notice of funding opportunity for manufacturing incentives intended to restore U.S. leadership in semiconductor manufacturing.
During the briefing, the CHIPS team explained how Commerce is overseeing $50 billion to revitalize the U.S. semiconductor industry, including $39 billion in semiconductor incentives, as part of the bipartisan CHIPS and Science Act. The CHIPS team provided an overview of the funding opportunity, which seeks applications for projects to construct, expand, or modernize commercial facilities to produce leading-edge, current-generation and mature-node semiconductors. Governors’ offices shared their questions with the Commerce officials who then described how states and territories can best support applications.
Through the Q&A session, it was clarified that a letter demonstrating an offer of a state/local government incentive does not need to be submitted by the applicant with the Statement of Interest, is optional for a pre-application but is a requirement for submission of the full application. It was also clarified that both mature packaging and advanced packaging facilities are eligible for funding under the current NOFO (back-end technologies component), and that the $75 billion loan and loan guarantee program should available for this and forthcoming notices of funding opportunity under the CHIPS for America program.
Slides from Chips for America office briefing to NGA, October 11, 2022.
Key briefing takeaways for states and territories include:
- Applicants must demonstrate they have secured incentives from state or local government.
- State and local incentives could include investments in industrial infrastructure that support the proposed project or broader development of the supplier ecosystem, workforce investment or long-term tax credits.
- States and localities could demonstrate commitment to the investment through providing expedited permitting processes; offering a point of contact to assist with site selection, supplier discovery and compliance with local laws; establishing a system integrator that works with ecosystem companies; provides planning and support for ancillary investments (housing, community development); and develops partnerships with other states and localities where relevant.
Slides from Semiconductor Industry Association (SIA) briefing to NGA, “Chips Act Overview,” September 1, 2022
Presented by David Isaacs, SIA VP for Government Affairs, who provided an overview of the law and discussed how the investments will support competitiveness and economic priorities for states and territories.
Semiconductor Industry Association (SIA) policy reports:
- The Growing Challenge of Semiconductor Design Leadership, Semiconductor Industry Association, November 28, 2022.
- 2021 State of the U.S. Semiconductor Industry.
- Government Incentives and US Competitiveness in Semiconductor Manufacturing, Semiconductor Industry Association, September 16, 2020.
National Semiconductor Economic Roadmap (NSER), December 8, 2022.
- Along with the NSER participants, the roadmap was developed in partnership with Boston Consulting Group and the Arizona Commerce Authority.
Association of University Research Parks (AURP):
- White Paper: The Geography of Technology, Science, and Innovation Under the CHIPS and Science Act. December 15, 2022.
- Update on AURP White Paper: Congress Makes Down Payment (But a Bit Short) on Chips and Science Act, January 4, 2023
McKinsey & Company, Public Sector Practice:
- The CHIPS and Science Act: Here’s what’s in it, October 4, 2022.
- Strategies for building US semiconductor fabs: Finding skilled labor, February 7, 2023
Federal Funds information for States (FFIS):
- Analysis of FY2023 Enacted Budget for Department of Commerce here (password protected for member states and territories)
- State tax credits and incentives in the CHIPS Act and IRA: Federal initiatives offer significant value at state level, 2022
- Efforts underway in the states to capitalize on CHIPS funding, September 8, 2022
- With high-tech manufacturing plants promising good jobs in Ohio, workforce developers race to get ready, January 24, 2023
- Texas Governor Abbott Announces Support For Texas CHIPS Act, March 15, 2023
- Kansas Governor Kelly Announces EMP Shield Plans to Build $1.9 Billion, 1,200-Job Computer Chip Manufacturing Facility in Coffey County, February 20, 2023
- Utah Governor Cox Announces that Texas Instruments to Build New Chip Factory in Lehi, Utah, February 15, 2023
- Kansas Governor Kelly Announces Integra Technologies to Invest $1.8B, Create Nearly 2,000 Jobs with Wichita Semiconductor Plant, February 2, 2023
- Florida Governor Ron DeSantis Announces Nearly $10 Million to Support Chip and Semiconductor Manufacturing, January 5, 2022
- Arizona Commerce Authority: Industry, State Leaders Publish U.S. Semiconductor Economic Roadmap, December 8, 2022.
- Indiana Governor Holcomb Advances Leading Edge Semiconductor Research, November 21, 2022.
- Michigan Governor Gretchen Whitmer forms Semiconductor Talent Action Team to identify clear semiconductor-specific curricula and R&D investments, November 17, 2022.
- California Invests in Cutting-Edge Technologies to Foster Innovation, Create More Than 6,800 New Jobs, November 17, 2022.
- Hochul, Schumer, McMahon Announce: Micron is Coming to Onondaga County! Micron Will Invest an Unprecedented $100 Billion Over the Next 20-Plus Years to Transform Central New York Into a Global, Leading-Edge Semiconductor Manufacturing Hub, October 4, 2022.
- Governor Kate Brown Calls for Bipartisan Support of Semiconductor Task Force Recommendations, September 22, 2022.
- North Carolina Governor Cooper Announces that Wolfspeed Selects North Carolina for 445 Acre Manufacturing Campus: Semiconductor company will create 1,800 new jobs at the Chatham-Siler Advanced Manufacturing Site, September 9, 2022
- New York Governor Kathy Hochul signs Green CHIPS Legislation, August 11, 2022
- Thousands of NEW California Jobs in Cutting-Edge Industries, June 17, 2022.
- Governor DeWine Announces Monumental Investment by Intel to Bring Their Most Advanced Semiconductor Manufacturing Plants to Ohio, January 21, 2022.
- Governor Abbott Announces National Semiconductor Centers Texas Task Force, October 21, 2021.
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