The Creating Helpful Incentives to Produce Semiconductors Act (CHIPS Act) has been introduced in Congress to reinvigorate U.S. chip manufacturing and innovation, particularly by pushing chip manufacturing back to the United States because of national security concerns. Steve Blank summarizes and discusses the current situation in the United States concerning national security, China and chip manufacturing, here. A press release sets forth the main provisions of the CHIPS Act as follows:
The CHIPS For America Act:
- Creates a 40-percent refundable ITC for qualified semiconductor equipment (placed in service) or any qualified semiconductor manufacturing facility investment expenditures through 2024. The ITC is reduced to 30 percent in 2025, 20 percent in 2026, and phases out in 2027.
- Directs the Secretary of Commerce to create a $10 billion federal match program that matches state and local incentives offered to a company for the purposes of building a semiconductor foundry with advanced manufacturing capabilities.
- Creates a new NIST Semiconductor Program to support advanced manufacturing in America. The program’s funds will also support STEM workforce development, ecosystem clustering, U.S. 5G leadership, and advanced assembly and test.
- Authorizes funding for DOD to execute research, development, workforce training, test, and evaluation for programs, projects, and activities in connection with semiconductor technologies and direct the implementation of a plan to utilize Defense Production Act Title III funding to establish and enhance a domestic semiconductor production capability.
- Requires the Secretary of Commerce to complete a report within 90 days to assess the capabilities of the U.S. industrial base to support the national defense in light of the global nature of the supply chain and significant interdependencies between the U.S. industrial base and that of foreign countries as it relates to microelectronics.
- Establishes a trust fund in the amount of $750M over ten years to be allocated upon reaching an agreement with foreign government partners to participate in a consortium in order to promote consistency in policies related to microelectronics, greater transparency in microelectronic supply chains, and greater alignment in policies towards non-market economies. To incentivize multilateral participation, a common funding mechanism is established to use this fund to support the development of secure microelectronics and secure microelectronics supply chains. A report to Congress is required for each year funding is available.
- Directs the President to establish, through the National Science and Technology Council, a Subcommittee on Semiconductor Leadership responsible for the development of a national semiconductor research strategy to ensure U.S. leadership in semiconductor technology and innovation, which is critical to American economic growth and national security, and to coordinate semiconductor research and development.
- Creates new R&D streams to ensure U.S. leadership in semiconductor technology and innovation is critical to American economic growth and national security:
- $2 billion to implement the Electronics Resurgence Initiative of the Defense Advanced Research Projects Agency.
- $3 billion to implement semiconductor basic research programs at the National Science Foundation.
- $2 billion to implement semiconductor basic research programs at the Department of Energy.
- $5 billion to establish an Advanced Packaging National Manufacturing Institute under the Department of Commerce to establish U.S. leadership in advanced microelectronic packaging and, in coordination with the private sector, to promote standards development, foster private-public partnerships, create R&D programs to advance technology, create an investment fund ($500M) to support domestic advanced microelectronic packaging ecosystem, and work with the Secretary of Labor on establishing workforce training programs and apprenticeships in advanced microelectronic packaging capabilities.