Billions of dollars in federal incentives have been unlocked for manufacturers of semiconductors under the government’s newly minted CHIPS Act.
The Commerce Department launched on Tuesday the first round of funding, which provides access to $39B worth of loans or grants for both the expansion of existing chip factories and construction of new ones, according to Seeking Alpha.
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Major players in the space, including Intel, IBM and Texas Instruments, have already kicked off growth plans tied to the act, but accessing the funds comes with strings attached.
Companies that seek $150M or more must guarantee affordable, high-quality childcare for their workers, The New York Times reports, and preference for funding will go toward those that promise not to buy back stock. The latter is meant to encourage reinvestment in the company rather than diverting funds to Wall Street, per the NYT.
Semiconductors are a vital component of the microchips used in cars and electronic devices. The pandemic made it painfully clear that the U.S. was woefully undersupplied in its chip production capacity, with the vast majority of manufacturing based overseas.
That realization prompted President Joe Biden to revive domestic manufacturing by signing the $280B CHIPS and Science Act of 2022 into law in August. The legislation funneled $53B toward the manufacturing of semiconductors, a move that is expected to fuel the development of new factories across the country.
Another funding round for the production of semiconductor materials and equipment facilities is expected to open in the spring, according to Seeking Alpha.
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