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In an effort to reduce its reliance on Taiwan and outcompete China in chip manufacturing, the Biden administration has launched the CHIPS for America funding program worth $39 billion. The program’s objective is to establish the US as the primary choice for leading chip manufacturers, with numerous cutting-edge logic fabrications and DRAM manufacturing facilities set up by the decade’s end.
Authorized under the CHIPS and Science act, the Biden administration has divided the program into several rounds of funding opportunities. The first opportunity, which opens for applications on March 31, 2023, will focus on constructing, expanding, or modernizing commercial facilities for the production of current-generation, leading-edge, and mature-node semiconductors.
Strict guardrails in place
To ensure that the companies use the funding efficiently and for the right purposes, the government has put guardrails in place. Firstly, companies cannot use the funding for stock buybacks or to pay out dividends. Secondly, payments will be tied to meeting specific milestones to ensure that funding is used in a way that aligns with the program’s vision for success. Finally, companies requesting more than $150 million in funding will need to provide childcare for their construction and factory workers and share part of their profits with the government if they make more than projected.
While the first round funding opportunity focuses on commercial facility construction, the program will introduce additional funding rounds in the spring and fall to increase investment in chip-making materials and research facilities. With Samsung and TSMC already onboard to establish factories across the US, the CHIPS for America funding opportunity is a vital step in boosting the US semiconductor industry and contributing to economic recovery and national security.
“Today’s Notice of Funding Opportunity is a crucial step to unleashing the promise of the CHIPS and Science Act to create good-paying jobs right here at home and end our dangerous dependence on semiconductors manufactured abroad,” said Rep. Frank Pallone Jr. (D-NJ).
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