Introduction

Effective August 9, 2022, the Creating Helpful Incentives to Produce Semiconductors and Science Act – popularly known as “CHIPS” – provides funding to various programs to reduce reliance on foreign semiconductor production by enhancing the United States workforce, manufacturing and research capacity in the semiconductor industry. The plan for the CHIPS and Science Act has been to administer program funding over a five-year term, for which we are now well underway.

For a broad summary of the structure of the CHIPS Act, please reference our earlier piece which summarizes the various funding “buckets” under the Act. This article will focus on the funding opportunities presented by the largest of those buckets, the ~$50B in funding allocated to the CHIPS for America Fund, to be administered by the National Institute of Science and Technology (NIST) by way of several funding opportunities. Interested parties should note, as is detailed in our previous summary, that investments are restricted against individuals or companies controlled by or with ties to foreign entities of concern, as determined by and at the discretion of the Secretary of Commerce, Secretary of Defense, and Secretary of National Intelligence.

The Advanced Manufacturing Tax Credit continues to accept applications on a rolling basis for tax credits worth up to 25% of qualifying investment to expand or create semiconductor manufacturing operations. Interested parties are encouraged to review our prior summary located here.

NIST Commercial Incentive Funding Opportunities

NIST has activated two incentive funding opportunities under the CHIPS Act. Although neither is currently accepting applications, interested parties should stay tuned as NIST has already reopened these programs previously. The two programs are almost identical but are split into two programs: “large projects” (at least $300M) and “small projects” (less than $300M). Although similar, the programs have independent timelines and conditions. The following is a brief summary:

1.     CHIPS Incentives Program – Commercial Fabrication Facilities (‘large’ projects)

      a. First activated in June 2023 until September 2023, this program was reactivated from October 2023 to June 2024, with the application deadline of June 18 having just passed.

      b. The incentive encourages the construction, expansion, or refurbishment of commercial facilities for manufacture or fabrication of semiconductors, or equipment for the manufacture of semiconductors. Applications are reviewed on a case-by-case basis for direct funding, loans, or loan guarantees with awards sized with consideration to project specific needs. An applicant project must have minimum capital costs of $300 million. While NIST indicates that there is no maximum amount a project can receive, the agency expects most awards will range between 5-15% of the project’s capital expenditure. Cost sharing or local match is not required for this program but may be a factor for consideration in the NIST review of the project as state or local support can be an indicator of likely success of the project.

      c. Interested parties should set alerts as NIST has already reactivated this program once before.

2.     CHIPS Incentives Program – Facilities for Semiconductor Materials and Manufacturing Equipment (‘small’ projects)

      a. This program involves a two-stage application process. The first stage included submission of concept plans between December 2023 and February 2024. The second stage included those concepts notified/invited to continue and submit a full application.

      b. The program encourages growth in domestic US semiconductor industry to support economic and national security. Applicants include projects for the construction, expansion, or refurbishment of commercial facilities for semiconductor materials and manufacturing equipment with total capital costs of less than $300 million.

NIST Research and Development Funding Opportunities

NIST has three active R&D Programs furthering the objectives of and enabled by the CHIPS Act. Interested parties should stay tuned for reactivation of these funding opportunities and might consider whether federal and state R&D programs can provide concurrent assistance.

1.     CHIPS Manufacturing USA institute

      a.     Deadlines – CLOSED:

           i.    Concept papers were due June 20, 2024

           ii.   Full application (invite only – based on concept paper) due September 9, 2024

      b.     Eligibility:

           i.   This program incentivizes applicants who would establish and operate a CHIPS Manufacture USA institute focused on the development and use of ‘digital twins’ for semiconductor manufacturing, packaging, assembly, and testing.

2.     CHIPS Metrology Small Business Innovation Research (SBIR)

      a.     Deadline - CLOSED:

              i.   Full applications were due June 14, 2024

      b.     Eligibility:

              i.    This program incentivizes applicants who would explore the feasibility of an innovative technology or idea for the commercial microelectronics marketplace.

3.     CHIPS NAPMP Materials and Substrates Research and Development

      a.     Deadlines - CLOSED:

                i.    Concept papers were due April 12, 2024

                ii.    Full proposals (invite only – based on concept papers) due July 3, 2024

      b.     Eligibility:

                 i.    This program incentivizes applicants who would further R&D activities to expand domestic capacity for advanced packaging substrates and substrate materials.

Notice of Intent (NOI) to open a competition for new R&D activities focused on semiconductor advanced packaging has just been announced. Specific areas of interest are anticipated to include:

1.  Equipment, tools, processes, and process integration;

2. Power delivery and thermal management;

3.  Connector technology, including photonics and radio frequency (RF);

4.  Chiplets ecosystem; and

5.  Co-design/electronic design automation (EDA).

More information will be available soon.

‍

Conclusion

CHIPS has been active for two years now, but interested companies should continue to actively track CHIPS funding opportunities, as programs are still being (re-)opened periodically.

Further, as we described in our previous article, the Advanced Manufacturing Tax Credit is still active and will remain so until the end of 2026.