Chip manufacturers encouraged to apply for billions in incentives
WASHINGTON, D.C., February 28, 2023— Today, the federal CHIPS Program Office opened up its first funding opportunity for domestic semiconductor manufacturing, kicking off the nationwide race for $39 billion in manufacturing incentives and $11 billion in research and workforce development investments from the Department of Commerce. The funds were allocated in the CHIPS & Science Act, which U.S. Senator Maria Cantwell (D-WA) played a key role in getting over the finish line last year.
“The federal investments in semiconductor manufacturing announced today are expected to create 280,000 jobs nationwide,” said Sen. Cantwell. “The companies making up the “silicon forest” here in the Pacific Northwest, which already employ thousands of workers, are well positioned to bring more of those high-paying jobs to our region. The State of Washington is a long-time been a leader in high-tech research and manufacturing — and we will meet the moment once again.”
The CHIPS & Science Act directed the Department of Commerce to provide incentives to chip manufacturers and companies vital to the chip supply chain (e.g., chip equipment and materials suppliers). These incentives can include loans and loan guarantees as well as grants. Additional funds can support local workforce development efforts. Companies may also be eligible for a 25 percent investment tax credit for semiconductor manufacturing, administered by the Department of Treasury. Many companies across the Pacific Northwest, a thriving semiconductor industry hub, will be eligible for funds to establish or expand research and development, workforce training, chip manufacturing, and other semiconductor supply chain activities.
In August, Sen. Cantwell visited a local semiconductor manufacturer in Vancouver, Wash. to discuss the potential impacts of the CHIPS & Science Act on the region.
READ A LIST OF THE TOP 10 PRIORITIES OF THE CHIPS & SCIENCE ACT HERE
Under the Notice of Funding Opportunity (NOFO) released today, the CHIPS Program Office will consider project applications that:
- Bolster economic and national security, with plans to build facilities in the United States;
- Commit to developing and maintaining a highly skilled and diverse domestic workforce;
- Prove commercial viability, with a plan for reliable cash flows and continued investments;
- Demonstrate technical feasibility through a clear project execution plan, including major construction and operational milestones.
To protect the American taxpayer, the Department of Commerce will also:
- Preference applicants that contribute significant private capital to the project;
- Prohibit using CHIPS funds for dividends or stock buybacks and preference applicants that further commit to refrain from stock buybacks;
- Prohibit funding recipients from making significant chip manufacturing investments in countries of concern for 10 years;
- Consider whether applicants exhibit climate and environmental responsibility and plan to use domestic materials; and
- Establish mechanisms to suspend or claw back payments if a recipient fails to comply with the award terms.
Sen. Cantwell, who serves as chair of the Senate Committee on Commerce, Science and Transportation, was a main architect of the CHIPS & Science Act. In 2021, she advanced the U.S. Innovation and Competition bill in the committee, which culminated in a 24-4 bipartisan vote, and then managed the bill on the floor of the United States Senate, where it passed with a 68-32 vote. On May 12, 2022, Sen. Cantwell chaired the kickoff meeting of the Conference Committee to negotiate differences between the Senate and House version of the legislation.
For months, Sen. Cantwell called on Congress to act on the bill. She spoke on the Senate floor on March 28, 2022; March 24, 2022; March 21, 2022; February 10, 2022, and February 4, 2022, encouraging her colleagues to move the bill forward. Sen. Cantwell previously chaired a Commerce Committee hearing with tech and trucking industry CEOs on the importance of U.S. investment in America’s domestic semiconductor manufacturing and research and organized multiple classified briefings on the impact of the chip shortage on national and economic security.
SOURCE: Office of Senator Maria Cantwell press release