July 28, 2022
“Today Congress reaffirmed America’s global leadership and competitiveness by passing the CHIPS and Science Act, which will make critical investments to bolster domestic manufacturing and strengthen our workforce. These investments will reduce the shortage of essential semiconductor chips used in everything from electric vehicles to consumer electronics, shore up supply chains, lower consumer costs, and create tens of thousands of good-paying jobs right here at home. I am pleased to see that the bill maintains important safeguards to prohibit this funding from being used by corporations for stock buybacks and shareholder dividends. The bill also promotes American innovation by reforming and modernizing key federal science and research agencies to enhance their ability to conduct cutting-edge science and engineering research in emerging technologies like A.I. and advanced energy. Additionally, the bill includes a new program to create technology and innovation ‘hubs’ across the country and broaden participation in STEM fields. As Americans struggle with the cost of living, this historic bill will bring manufacturing back to the U.S. and create opportunity for our workers, strengthen the economy, and brighten our future.”
The CHIPS and Science Act includes:
- $54 billion in appropriations for the currently authorized Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act and public wireless supply chain innovation. This includes:
- $39 billion for incentives to build, improve, or expand U.S. semiconductor manufacturing.
- $11 billion for semiconductor R&D and workforce development.
- $1.5 billion for the Public Wireless Supply Chain Innovation Fund to support U.S. and allied leadership in the global telecommunications arena by accelerating open architectures and fostering a competitive, secure, and standards-based ecosystem for 5G and beyond networks.
- $500 million to support international information and communications technology security and semiconductor supply chain.
- $2 billion for the Department of Defense (DoD) to implement the Microelectronics Commons, a national network for onshore, university-based prototyping, lab-to-fab transition of semiconductor technologies - including DoD-unique applications - and semiconductor workforce training.
- A 25% investment tax credit for manufacturing of semiconductors or semiconductor manufacturing equipment in the U.S.
- Important guardrails provisions, including:
- Recipients of funding cannot use the funds for stock buybacks and shareholder dividends, and funds can be ‘reclaimed’ if these conditions are met.
- Commerce is required to ensure that the recipients of CHIPS manufacturing incentives meet their commitments to increase the participation of economically disadvantaged individuals in the semiconductor workforce. Commerce also must establish personnel to serve as a resource to support the participation of minority-owned businesses, Veteran-owned businesses, and women-owned businesses, in CHIPS-funded projects.
- Funds for semiconductor fabrication construction would include Davis-Bacon Act prevailing wage requirements.
- New authorizations and reforms to federal science and engineering research at the National Science Foundation (NSF), the Department of Energy’s Office of Science, and the National institution of Standards and Technology (NIST) within Commerce. The goal is to modernize these agencies to enhance research in emerging technologies like AI and advanced energy.
- Authorizes new regional technology and innovation hub program within the Department of Commerce to establish 20 ‘hubs’ around the country to focus on technology development job creation and expanding U.S. innovation capacity.
Fact sheets for the bill can be found here.