US Commerce aims to seek chips funding proposals by February

THE US Commerce Department said on Tuesday (Sep 6) it hopes by February to begin seeking applications for US$39 billion in government semiconductor chips subsidies to build new facilities and expand existing US production.

Congress in August approved US$52.7 billion for semiconductor manufacturing and research and a 25 per cent investment tax credit for chip plants, estimated to be worth US$24 billion. That credit applies to projects that start construction after Jan 1.

President Joe Biden signed the legislation to boost efforts to make the United States more competitive with China and to subsidise US chip manufacturing in a bid to alleviate a persistent chips shortage that has affected everything from washing machines and video games to cars and weapons.

Commerce said on Tuesday “funding documents, which will provide specific application guidance... will be released by early February 2023. Awards and loans will be made on a rolling basis as soon as applications can be responsibly processed, evaluated and negotiated.”

The department said it plans to use US$28 billion to “establish domestic production of leading edge logic and memory chips that require the most sophisticated manufacturing processes available today” and US$10 billion for new manufacturing capacity for “mature and current-generation chips, new and speciality technologies, and for semiconductor industry suppliers,” which includes chips used by automakers, weapons and in medical devices.

The chips bill also includes US$11 billion for research and development spending.

Commerce can use up to US$6 billion to support loans or loan guarantees rather than grants and “could be leveraged to support a US$75 billion credit programme.”

Commerce Secretary Gina Raimondo told Reuters in an interview last week that the first priority was to get a team in place to oversee the programme and then issue “high level principles and guidelines for how we’re going to be running this programme and then we’re going to have a period of pretty intensive stakeholder engagement” over “the next handful of months.” REUTERS