POLITICAL ECONOMY

Biden-Harris Administration Announces CHIPS For America Funding Opportunity To Strengthen Semiconductor Supply Chains

US President and US VP
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By Godson Umejiego, Bureau Chief, The Americas

On Friday September 29, 2023, the US Department of Commerce announced a funding opportunity for smaller supply chain projects and businesses to access CHIPS for America funds. As part of President Biden’s Investing in America agenda, the bipartisan CHIPS and Science Act includes incentives to strengthen supply chains, support smaller projects and businesses, and create good-paying jobs in local communities across the country. 

The new funding opportunity is open to projects with capital investment below US$300 million involving the construction, expansion, or modernization of commercial facilities in the United States for semiconductor materials and manufacturing equipment. These projects will produce the equipment, chemicals, gases, and other materials that are critical to manufacturing semiconductors in America. Suppliers are also strongly encouraged to apply for CHIPS incentives alongside other institutions from their regions to expand economic opportunity and competitiveness. Supply chain investments can help regions increase economic resilience, create new pathways to good jobs, and bring emerging technology innovation home to their communities. The funding opportunity builds upon the Department’s announcement in June to expand funding to larger supply chain projects, and the Biden-Harris Administration’s strategic vision to strengthen the semiconductor supply chain through CHIPS for America investments. 

The investments made as part of this new funding opportunity will support three strategic objectives as outlined in our “Vision for Success”: (1) strengthen supply chain resilience, (2) advance US technology leadership; and (3) support vibrant US fab clusters with a reliable ecosystem of suppliers.

This new funding opportunity features an application process designed to be accessible for smaller businesses and projects. The application process includes two phases: 

Concept Plan: Applicants will be asked to submit a concept plan describing how their proposed project addresses core strategic objectives, including US economic and national security. Concept plans will be accepted between December 1, 2023, and February 1, 2024.

Full Application: The Department of Commerce will review submitted concept plans and invite the most promising applicants that demonstrate how they advance program priorities to submit a full application for CHIPS incentives. The full application submission dates will be communicated to applicants individually upon notifying them of their advancement.

This funding opportunity follows through on the CHIPS and Science Act’s requirement that the Department establish a program to incentivize investment in the construction, expansion, or modernization of commercial facilities in the US for the semiconductor supply chain, including materials and manufacturing equipment.

In June, the Department of Commerce expanded its first funding opportunity released in February 2023 to accept applications for larger-scale supply chain projects, which includes the construction, expansion, or modernization of semiconductor materials and manufacturing equipment facilities where total capital investment equals or exceeds US$300 million. 

The Department continues to work to ensure CHIPS funding attracts private capital across the semiconductor ecosystem and to use taxpayer dollars as efficiently and effectively as possible. Since announcing the first funding opportunity in February, the Department of Commerce has received over 500 statements of interest and over 100 pre- and full applications from companies seeking to build semiconductor projects across 42 states, demonstrating widespread enthusiasm from the private sector to continue investing in America. Today’s funding opportunity also maintains the Department’s emphasis on building the construction and facility workforce that will support resilient domestic supply chains, including through partnerships with labor, educational institutions, workforce development organizations, and others.

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