$52.7 billion allocated to support U.S. semiconductor manufacturing
Congress passed and President Biden signed the $52.7 billion Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022. The bill is a slimmed down version of the previously proposed America COMPETES and U.S. Innovation and Competition acts and excludes Section 301 tariff relief and many other trade provisions included in the originally proposed bills. The final Act provides:
- $50 billion over five years for a CHIPS for America Fund to develop domestic semiconductor manufacturing capability.
- $2 billion for a CHIPS for America Defense Fund to support onshore technology development and workforce training.
- $500 million for a five-year CHIPS for America International Technology Security and Innovation Fund to coordinate with foreign partners.
- $200 million for a CHIPS for America Workforce and Education Fund to promote growth of a domestic semiconductor workforce.
The Act provides a 25 percent investment tax credit (ITC) for semiconductor manufacturing, covering both manufacturing equipment and the construction of semiconductor manufacturing facilities. It also includes incentives for manufacturing of the specialized tooling equipment required to produce semiconductors.
“CHIPS and ITC funding include guardrails to prevent countries that pose a national security risk, mainly meaning China, from receiving these monies,” said Christine Henter-Sohar, NAFEM legal counsel, Barnes & Thornburg.
According to National Association of Manufacturers (NAM) President and CEO Jay Timmons, “Congress has acted wisely with the CHIPS Act. We need Congress to continue standing with manufacturers and focus on policies that help us complete with China and other countries.”
The U.S. Chamber of Commerce added, “Passage of the bipartisan CHIPS and Science Act sends a clear message to companies at home and around the globe – the American people are ready and able to make the necessary investments to spur economic growth, increase manufacturing and safeguard our national security. The bill includes critical funding for research and development that will help American innovators compete on the global stage.”