Frequently Asked Questions: Commercial Fabrication Facilities

Potential applicants for semiconductor materials and manufacturing equipment facilities for which the capital investment equals or exceeds $300 million may submit pre-applications (which are recommended) on a rolling basis beginning Friday, September 1, 2023, until May 20, 2024. Full applications will be accepted on a rolling basis beginning Monday, October 23, 2023, until June 18, 2024. Entities that submit a pre-application between April 19, 2024, and May 20, 2024, will have 45 days after receiving a feedback letter to submit a full application, notwithstanding the general June 18, 2024, full application deadline.

On September 29, 2023, the CHIPS Program Office released an additional funding opportunity for applications relating to semiconductor materials and manufacturing equipment facilities with capital investments under $300 million. For more information regarding the timeline for application submissions and other details about the smaller supplier funding opportunity, see Fact Sheet: Dedicated Supply Chain Notice of Funding Opportunity or frequently asked questions. 

If you are applying to construct, expand, or modernize a semiconductor material or semiconductor manufacturing equipment facility and your project’s capital investment equals or exceeds $300 million, then you are eligible under the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity, provided you meet the other statutory requirements for funding under the CHIPS Act. For more information, see Sections I.B.1 (“What facilities are eligible for funding under this NOFO?”) and I.B.2 (“What are the eligibility requirements for funding under this NOFO?”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

If you are applying to construct, expand, or modernize a semiconductor material or semiconductor manufacturing equipment facility and your project’s capital investment falls below $300 million, then you may be eligible to apply for funding under the dedicated Notice of Funding Opportunity the CHIPS Program Office will be releasing at a later date. The CHIPS Program Office will provide additional details regarding eligibility requirements in that funding opportunity. For an overview of that forthcoming funding opportunity, see Fact Sheet: Supply Chain Funding Opportunities.

Yes, projects for semiconductor materials and manufacturing equipment facilities for which capital investments are below $300 million are able to apply for CHIPS Incentives through the smaller supply chain project funding opportunity the Department released on September 29, 2023. That funding opportunity includes a different application process designed for smaller businesses. For more information regarding the timeline for application submissions and other details about the smaller supplier funding opportunity, see Fact Sheet: Dedicated Supply Chain Notice of Funding Opportunity or frequently asked questions.

The dedicated supply chain funding opportunity will be open to projects for materials and manufacturing equipment facilities for which the capital investment falls below $300 million. The Department will seek applicants that advance any of the three objectives outlined in the Vision for Success. These objectives are strengthening supply chain resilience, advancing U.S. technology leadership, and supporting vibrant U.S. fab clusters. For projects advancing the third objective—supporting vibrant U.S. fab clusters—the Department will encourage suppliers to consider applying as part of a consortium that promotes the development and sustainability of semiconductor clusters.

Successful consortia might include multiple supplier facilities, one or more state or local government entities, and an anchor institution such as a semiconductor fab (semiconductor fabs will not be eligible for funding under this opportunity; applicants seeking CHIPS incentives for semiconductor fabs may apply under the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity). Consortia may also include workforce providers, labor unions, economic development corporations, institutions of higher educations, philanthropic foundations, industry organizations, or other relevant entities. One example of a strong consortium could be a science park in which state or local government entities provide land, shared utilities and infrastructure, streamlined permitting, and incentives to a group of suppliers located near a fab.

The funding opportunity will include a different application process, designed for smaller projects and businesses.

For more information, see Fact Sheet: Supply Chain Funding Opportunities.

For the purposes of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity, the CHIPS Program Office has defined capital investments as the costs required to complete the construction, expansion, or modernization of the project and initiate operation, broken down by category such as land, construction (e.g., labor and material), equipment, infrastructure improvements (e.g., utility plants, access to infrastructure, or wastewater treatment plants), and administrative expenses directly attributable to the construction, expansion, or modernization (e.g., legal, engineering, and permitting fees). See Section IV.I.3 (“Financial Information”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

As defined in this funding opportunity, semiconductor materials facilities are facilities for the manufacture or production of materials used to manufacture semiconductors, which are the chemicals, gases, raw and intermediate materials, and other consumables used in semiconductor manufacturing (emphasis added). Potential applications related to raw semiconductor materials facilities may apply for funding so long as the capital investment equals or exceeds $300 million.

Eligible, responsive and complete applications will be evaluated based on the extent to which they meet the six evaluation criteria laid out in the Notice of Funding Opportunity, including the extent to which the application addresses the program’s economic and national security objectives. Applications for semiconductor materials and equipment facilities will be evaluated, in particular, on the extent to which the proposed project strengthens supply chain resilience; helps build productive and self-sustaining semiconductor ecosystems; and advances economic security by locating critical manufacturing in the United States and contributing to the U.S. innovation ecosystem.

As defined in the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity, semiconductor materials facilities include facilities that manufacture or produce raw and intermediate materials, and semiconductor manufacturing equipment facilities include facilities that produce the subsystems that enable or are incorporated into manufacturing equipment. These suppliers to a supplier may apply for funding so long as their capital investment equals or exceeds $300 million.

Eligible, responsive and complete applications will ultimately be evaluated based on the extent to which they meet the six criteria laid out in the Notice of Funding Opportunity, including the extent to which the application addresses the program’s economic and national security objectives. Applications for semiconductor materials and equipment facilities will be evaluated, in particular, on the extent to which the proposed project strengthens supply chain resilience; helps build productive and self-sustaining semiconductor ecosystems; and advances economic security by locating critical manufacturing in the United States and contributing to the U.S. innovation ecosystem.

If you are a potential applicant for a project related to a semiconductor material facility or a semiconductor manufacturing equipment facility—as these facilities are defined in the Notice of Funding Opportunity, see Section I.B.3 of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity—then you are eligible to apply for funding even if a portion of your business is not related to semiconductors.

Please note, however, that all supply chain projects will be evaluated for consistency with overall program priorities, including the extent to which the proposed project strengthens semiconductor supply chain resilience; helps build productive and self-sustaining semiconductor ecosystems; and advances economic security by locating critical manufacturing in the United States and contributing to the U.S. innovation ecosystem. Our evaluation of the merits of a supply chain project will take into account the materiality of the project’s semiconductor-related output, relative to both overall project size and to the U.S. semiconductor ecosystem as a whole.

The CHIPS Program Office generally expects that most CHIPS direct funding awards will range between 5-15% of project capital expenditures. That range accounts for the expectation that most projects will be eligible for the Investment Tax Credit. For projects that are not eligible for the Investment Tax Credit, such as projects related to semiconductor materials facilities, that range may be higher. See Section I.B.7 (“How much support can a project receive in CHIPS Direct Funding?”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

Materials facilities are not expected to fall exclusively within the 5-15% range. That range is meant to apply generally to projects that are eligible for the Investment Tax Credit. For materials facilities that are not eligible for the Investment Tax Credit, the range may be higher. See Section I.B.7 (“How much support can a project receive in CHIPS Direct Funding?”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

The 35% percent figure reflects certain assumptions about a project, including debt-to-equity ratios and the contribution of the Investment Tax Credit, that may not apply in all cases. The ceiling may be higher if a project is not eligible for the Investment Tax Credit, such as for projects related to semiconductor materials facilities. See Section II.C (“Award Amount”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

The Department of Commerce has laid out three core economic and national security objectives for investments in the supply chain. First, the Department aims to strengthen supply chain resilience by investing in materials and manufacturing equipment facilities that reduce vulnerabilities associated with geographic concentration, supply-chain bottlenecks, and/or production in foreign countries of concern. Second, the Department aims to invest in materials and manufacturing equipment facilities that advance economic security by locating critical manufacturing know-how in the United States and contributing to the U.S. innovation ecosystem. Third, the Department seeks to support applications for semiconductor materials and manufacturing equipment facilities that help build productive and self-sustaining ecosystems, including by clustering with semiconductor fabrication facilities or otherwise improving the competitiveness and innovativeness of the U.S. semiconductor ecosystem.

For more information, please see the Vision for Success: Facilities for Semiconductor Materials and Manufacturing Equipment.

The CHIPS Act provides that funding is available to covered entities “to incentivize investment in facilities and equipment in the United States” for the fabrication, assembly, testing, advanced packaging, or production of semiconductors, materials used to manufacture semiconductors, or semiconductor manufacturing equipment. Applicants must therefore demonstrate how the CHIPS incentives requested will incentivize the applicant to make investments in facilities and equipment in the United States that would not occur in the absence of CHIPS incentives. 

For applications containing projects that have already been announced or begun construction, this standard could be met by demonstrating that the CHIPS incentives requested will enable the applicant to meaningfully enhance the size, scope, speed, or technical ambition of the overall application. If the applicant cannot make this type of demonstration, it will have to show that the project would not occur without CHIPS funding.

An applicant must be a “covered entity” to receive CHIPS incentives, and for the purposes of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity, a “covered entity” includes a consortium of private-sector entities or of nonprofit, public, and private-sector entities with a demonstrated ability to substantially finance, construct, expand, or modernize a facility eligible for funding.

Consortia also play a role in the funding opportunity the Department released on September 29, 2023, for the construction, expansion, or modernization of facilities for semiconductor materials and manufacturing equipment for which the capital investment falls below $300 million. For more information, see Fact Sheet: Dedicated Supply Chain Notice of Funding Opportunity or frequently asked questions.

The $300 million threshold applies on a per project basis, and for the purposes of an application, a “project” is a set of capital expenditures for the construction, expansion, or modernization of a single facility. Thus, the capital investments for each facility for which a consortium is applying for CHIPS funding must equal or exceed $300 million.

All applicants applying for funding under the Notice of Funding Opportunity for Commercial Fabrication Facilities, including supply chain applicants (for a project with a capital investment equaling or exceeding $300 million), must submit a statement of interest with a brief description of the planned application. The Department strongly encourages applicants to submit statements of interest at the earliest possible date, as these statements enable the Department to gauge interest in the program and plan for pre-application or application review. Entities are no longer required to wait at least 21 days after submitting a Statement of Interest before making their next submission and may submit a pre- or full application immediately after submitting a Statement of Interest.   Supply chain applicants for projects with capital expenditures less than $300mm requesting funding under Facilities for Semiconductor Materials and Manufacturing Equipment NOFO are not required to submit a statement of interest.  

No, the process for applying for Section 9902 funding is separate from the processes of applying for Section 9906 funding, which is overseen by the CHIPS Research and Development Office. The CHIPS Program Office encourages applicants to consider applying to both programs.

Application information can be found at on the CHIPS website and the CHIPS Incentives Portal. For further details on the application process and submission requirements, please refer to the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

The first funding opportunity is open to applicants seeking funding for the construction, expansion, or modernization of (a) commercial facilities for the front- and back-end fabrication of leading-edge, current-generation, and mature-node semiconductors; (b) commercial facilities for wafer manufacturing; and (c) commercial facilities for materials used to manufacture semiconductors and semiconductor manufacturing equipment, provided that the capital investment equals or exceeds $300 million.  

The CHIPS Program Office recently released a smaller supply chain project funding opportunity focused on the construction, expansion, or modernization of facilities for semiconductor materials and manufacturing equipment for which the capital investment falls below $300 million. 

The optional pre-application stage provides an early opportunity for active dialogue between the CHIPS Program Office and potential applicants to ensure proposed projects are consistent with program requirements and address program priorities. Our pre-application review will conclude with a written assessment of the strengths and weaknesses of the proposal and any further recommendations for improvement. The CHIPS Program Office strongly encourages pre-applications for potential applicants for (a) current-generation, mature-node, or back-end production facilities, (b) wafer manufacturing facilities, and (c) semiconductor materials and manufacturing equipment facilities for which the capital investment equals or exceeds $300 million. See I.B.9 (“How does the application process work”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

The first step in the application process is the submission of a statement of interest. A statement of interest must be submitted prior to submitting a pre-application or full application. To submit a statement of interest, applicants will first need to register for an account on the CHIPS Incentives Portal. 

Before receiving an award, each applicant for funding must also have an active registration in the System for Award Management. Applicants are strongly encouraged to begin the process of registering for SAM.gov as soon as possible. Although this process typically takes less than two weeks to complete, it can sometimes take more than six months to complete due to information verification requirements. Download SAM.gov’s Entity Registration Checklist for comprehensive instructions. 

Potential applicants do not need to have an active SAM.gov registration to submit an application. It is necessary to receive an award, however, so potential applicants are highly encouraged to register on SAM.gov as soon as possible.

Statements of interest for all potential applicants—including those that expect to be eligible in future funding rounds—will be accepted on a rolling basis beginning on February 28, 2023. Entities are no longer required to wait at least 21 days after submitting a Statement of Interest before making their next submission and may submit a pre- or full application immediately after submitting a Statement of Interest. The deadline to submit a Statement of Interest is Tuesday, June 18, 2024.

For leading-edge applications, pre-applications (optional) will be accepted on a rolling basis until May 20, 2024, and full applications will be accepted on a rolling basis beginning on March 31, 2023, until June 18, 2024.  For potential applicants for current-generation, mature-node, and back-end production facilities, pre-applications (which are recommended) will be accepted on a rolling basis beginning on May 1, 2023, until May 20, 2024, and applications will be accepted on a rolling basis beginning on June 26, 2023, until June 18, 2024.

For applications for (1) wafer manufacturing facilities and (2) semiconductor materials and manufacturing equipment facilities for which the capital investment equals or exceeds $300 million, pre-applications (recommended) will be accepted on a rolling basis beginning on September 1, 2023, until May 20, 2024, and full applications will be accepted on a rolling basis beginning on October 23, 2023, until June 18, 2024.

Entities that submit a pre-application between April 19, 2024, and May 20, 2024, will have 45 days after receiving a feedback letter to submit a full application, notwithstanding the general June 18th, 2024, full application deadline. 

In the pre-application stage, an applicant should be prepared to submit “Sources and Uses of Funds” information that details costs and capital sources for each project; audited company financials; a summary financial model with project cash flows, including income statement and balance sheet information; and detail on the applicant’s incentive request from the CHIPS Incentives Program. For more information, see Section IV.H.3 (“Financial Information”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

In the full application stage, applicants will be required to provide robust and detailed company-level and project-specific financial data. For more detailed information, see “Financial Information” in Sections IV.H.3 and IV.I.7 of the Notice of Funding Opportunity.

The CHIPS Program Office and the Department recognize that protecting confidential business information from public disclosure is important both to applicants and to the success of the program. Please see Handling of Confidential Information for more information. 

Information that is populated in structured questions in the Statement of Interest will automatically be labeled as Controlled Unclassified Information—confidential business information (CUI//PROPIN). No additional legends are required.  Please note that this applies only to the Statement of Interest and portions of the optional pre-application with structured data inputs; applicants will be required to mark the confidential information contained in uploaded pre-application documents and full applications consistent with the directions in the CHIPS Incentives Program—Commercial Fabrication Facilities Notice of Funding Opportunity.

Congress provided in the CHIPS Act that “any information derived from records or necessary information disclosed by a covered entity to the Secretary” with respect to CHIPS funding is exempt from disclosure under the Freedom of Information Act (FOIA) and “shall not be made public.” See 15 U.S.C. § 4652(a)(6)(G). This exemption provides strong protection for applicants who are a “covered entity,” as defined in the CHIPS Act. See 15 U.S.C. § 4651(2). In addition, FOIA Exemption 4 protects from disclosure “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.” See 5 U.S.C. § 552. For more information, see Section IV.C (“Confidential Information”) of the CHIPS Incentives Program—Commercial Fabrication Facilities Notice of Funding Opportunity.

The Department of Commerce anticipates that some potential applicants may be in earlier stages of developing the project(s) for which they intend to apply for CHIPS Incentives. Pre-applications are particularly useful in this scenario, as it enables the CHIPS Program Office to provide meaningful feedback to the potential applicant.

Yes. The CHIPS Program Office can provide feedback throughout the application process. Pre-applications are particularly useful for providing feedback before an applicant goes through the effort of submitting a full application. The pre-application process will conclude with a written assessment of the strengths and weaknesses of the proposal and non-binding recommendations for next steps, as appropriate. Such recommendations could include, for example, to submit a revised pre-application, submit a full application, or not submit a further pre-application or full application. The CHIPS Program Office will also provide feedback to applicants during the full application stage.

For more information, see Section I.B.9 (“How does the application process work?”) and Section V.C (“Review and Selection Process”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

Yes. The CHIPS Program Office may contact applicants to obtain additional or clarifying information or to provide feedback or recommendations for improvement. The CHIPS Program Office may also conduct interviews with applicants.

Applicants are encouraged to provide as much detail as they can at each application stage to prevent delays in evaluation.

The timing for full application review and due diligence will vary from project to project and will depend on the nature and quality of each application. For a more detailed discussion of the application review and selection process, see Section 1.B.9 (“How does the application process work?”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.  

If denied funding, an applicant may not resubmit the same or a substantially similar application in the future. Applicants may, however, submit a new application for different project(s).

Applicants should be diligent in ensuring that their applications are responsive to the requirements set out in the funding announcement. Full applications will be reviewed on receipt to determine eligibility, completeness, and responsiveness to these requirements. Full applications determined to be ineligible, incomplete, or nonresponsive will be returned to the applicant. The Department may, in its discretion, review a substantially complete application if any gaps in information can be rectified easily during the review process.

In general, the application process will be characterized by substantial back-and-forth between the CHIPS Program Office and the applicant. The CHIPS Program Office may reach out to applicants following the submission of a statement of interest, for example, to discuss an applicant’s proposed project. In addition, following submission of the pre-application or full application, the CHIPS Program Office may request additional information or ask clarifying questions about the information submitted and provide feedback for future submissions or revisions. The review process may include interviews with applicants and consultation with outside contractors or experts, if deemed necessary to assist in the merit assessment. Applicants may direct questions on their application to apply@chips.gov.

The CHIPS Program Office may decide to engage outside advisors (including but not limited to legal and technical advisors) during the application review process. Once an application reaches the due diligence stage, the applicant will be responsible for the costs of any outside advisors. Applicants will be asked whether they are willing to cover these costs before they move to this stage in the process. As these costs will vary by project, the CHIPS Program Office will be available to discuss with the applicant how such costs may be monitored and controlled. See Section I.B.9 (“How does the application process work?”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

Before an applicant advances to the due diligence phase, the Department will prepare a non-binding Preliminary Memorandum of Terms (PMT) that will include recommendations for the amount and form of any CHIPS incentive and key terms that should be considered for inclusion in an award. These recommendations may deviate from what the applicant requested. The CHIPS Program Office will provide the PMT to the applicant for review and negotiation prior to or upon entering the due diligence phase. The terms of any final award, should one be issued, may vary from the PMT.

Please reach out to your government liaison and have them contact the CHIPS Program Office on your behalf at askchips@chips.gov. The CHIPS Program Office is able to engage in classified conversations and review sensitive information.

A company’s submission of a full application to the CHIPS Program Office pursuant to an active notice of funding opportunity, detailing the company’s proposal to construct, expand, or modernize a facility eligible under the notice of funding opportunity, constitutes a documented interest.

The CHIPS Incentives Program application portal requires an applicant submitting a statement of interest, pre-application, or full application to agree that neither the applicant nor any of its affiliates will issue any press release or otherwise publicly disclose the status of the statement of interest, pre-application or full application or the contents of any communications with the CHIPS Program Office or the Department of Commerce without the CHIPS Program Office’s prior written consent. The disclosure restriction applies to the public disclosure of any and all communications, including regarding the status of a submission, sent by the CHIPS Program Office to the applicant or affiliate. It does not apply to the public disclosure of communications, including the fact of submission, authored and sent by the applicant or its affiliate to the CHIPS Program Office.

The CHIPS Program Office (CPO) will provide feedback to potential applicants on the strengths and weaknesses of pre-applications submitted under the NOFO.  CPO’s pre-application feedback may, under limited circumstances, include a preliminary indication that the potential applicant is likely to receive a CHIPS Incentives Award, subject to certain conditions.  See NOFO Section I.B.9, which states that “[i]n exceptional cases with compelling national or economic security justification, pre-application feedback may include a preliminary indication that the potential applicant is likely to receive funding for project(s) proposed in the pre-application, contingent on the eventual submission of a complete full application, successful merit review, due diligence, and the future availability of funds.”  CPO’s assessment whether to include such a preliminary indication in its pre-application feedback will be based on CPO’s review of the pre-application under the evaluation criterion for economic and national security objectives set forth in NOFO Section V.A.1.  In order to advance the CHIPS Incentives Program’s goal of maximizing private sources of capital, potential applicants will be permitted to disclose the feedback letter including CPO’s preliminary indication with actual or potential financing sources for the proposed project on a confidential basis.  Any such letter will be preliminary, indicative and not binding on the company or the Department. 

The CHIPS Program Office is continuously evaluating programmatic priorities to maximize the impact of available CHIPS funds. The decision not to proceed with the CHIPS Program Office’s R&D NOFO at this time is a reflection of that process and recent direction from Congress in the latest appropriations law on the availability of CHIPS funding. The CHIPS for America is already oversubscribed, and our office is currently processing through concept plans and applications submitted for CHIPS incentives.   

The CHIPS Program Office’s R&D NOFO would have provided CHIPS incentives to construct, expand, or modernize eligible facilities for the ongoing research and development of semiconductors including the engineering, piloting, prototyping, experimenting, and testing of next generation semiconductor manufacturing technologies. 

Certain research and development (R&D) facilities may be funded through the first funding opportunity. Specifically, an R&D facility that (1) is co-located with, (2) is under common ownership and control of, (3) is directly and explicably connected to production in, and (4) serves, one or more commercial fabrication facilities eligible and proposed under the first funding opportunity (see Section I.B.1 of the of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity), may be considered part of that facility or those facilities and can be funded with that facility or those facilities under the first funding opportunity. An R&D facility that does not meet all four criteria is not eligible for the first funding opportunity. 

CHIPS for America also encourages interested parties to explore current and future opportunities within the CHIPS R&D Office. For example, the office currently has a funding opportunity open for National Advanced Packaging Manufacturing Program (NAPMP) focusing on Materials and Substrates Research and Development.  

No. This funding opportunity was originally going to be administered by CHIPS Program Office (CPO), which is different from the CHIPS R&D Office. Building and fostering a thriving domestic semiconductor R&D ecosystem remains one of CHIPS for America’s core priorities.    

The CHIPS R&D Office was allocated $11B from the CHIPS and Science Act to build and support a thriving semiconductor R&D ecosystem in the United States. The office recently released a funding opportunity for Materials and Substrates and is currently accepting concept plans. The CHIPS R&D Office will release additional funding opportunities in the future. 

A semiconductor is an integrated electronic device or system, most commonly manufactured using materials such as, but not limited to, silicon, silicon carbide, or III-V compounds, and processes such as, but not limited to, lithography, deposition, and etching. Such devices and systems include but are not limited to analog and digital electronics, power electronics, and photonics, for memory, processing, sensing, actuation, and communications applications. 

Only a “covered entity” as defined in the CHIPS Act, 15 U.S.C. § 4651(2), can apply for and receive a CHIPS Incentives Award. For purposes of this first funding opportunity, a “covered entity” means a nonprofit entity; a private entity; a consortium of private entities; or a consortium of nonprofit, public, and private entities with a demonstrated ability to substantially finance, construct, or expand a facility that is eligible under the funding opportunity. See Section III.A (“Eligible Applicants”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity for more information.

Generally speaking, applicants should be domestic legal entities. In exceptional cases, at the sole discretion of the Department of Commerce, a foreign entity may be permitted to apply and receive a CHIPS Incentives Award. After submitting a statement of interest, the foreign entity should seek guidance from the CHIPS Program Office as to whether an application will be permitted.

The CHIPS Act provides that funding is available to covered entities “to incentivize investment in facilities and equipment in the United States” for the fabrication, assembly, testing, advanced packaging, or production of semiconductors, materials used to manufacture semiconductors, and semiconductor manufacturing equipment. Applicants must therefore demonstrate how the CHIPS funding requested will incentivize the applicant to make investments in facilities and equipment in the United States that would not occur in the absence of CHIPS Incentives. 

For applications containing projects that have already been announced or begun construction, this standard could be met by demonstrating that the CHIPS Incentives requested will enable the applicant to meaningfully enhance the size, scope, speed, or technical ambition of the overall application. If the applicant cannot make this type of showing, it will have to demonstrate that the project would not occur without CHIPS funding.

Only projects of the types listed in Section I.B.1 (“What facilities are eligible for funding under this NOFO?”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity are eligible. Fabless companies that are not seeking to construct, expand, or modernize an eligible facility would not be eligible to apply. Fabless companies are, however, encouraged to engage or partner with potential applicants and consider ways to support the commercial viability of potential projects.

A “project” is a set of capital expenditures for the construction, expansion, or modernization of a single facility. A project also includes any related workforce development or operating expense costs for the project facility that the applicant proposes to cover with CHIPS Incentives funds.

An application may include more than one project, covering separate facilities, if the facilities are within a single location and under common ownership and control. For example, if the applicant intends construction, expansion, or modernization at three fabs at a single location, the applicant should submit a single application that includes three projects, corresponding to the construction, modernization, or expansion activities associated with each fab. An application may contain projects that occur simultaneously or sequentially. If an applicant wishes to propose projects involving facilities at different locations, or under different ownership and control, these projects should be in separate applications. For more information, see Section I.B.5 (“Can an application include more than one project?”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

Yes, a single company may submit more than one application. However, applicants that wish to apply for funding for more than one facility within a single location and under common ownership and control should include all of those facility projects in a single application. See Section I.B.5 (“Can an application include more than one project?”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

The CHIPS Act specifies that an applicant must have been offered a covered incentive from a state or local jurisdiction where the project is located for the purposes of attracting the construction, expansion, or modernization of the facility. Each applicant must provide a letter from a state or local government entity to demonstrate they have been offered a qualifying covered incentive. The letter should indicate the estimated size and nature of the incentive.

A “covered incentive” may take many forms, including a tax incentive for the purposes of constructing, expanding, or modernizing a facility within that jurisdiction. A covered incentive can also take the form of a workforce-related incentive (including a grant agreement relating to workforce training or vocational education), any concession with respect to real property, funding for research and development with respect to semiconductors, or any other incentive determined appropriate by the CHIPS Program Office.

The offer of a covered incentive may be contingent; however, any contingencies need to clearly be specified in the letter from the state or local government entity. Further, applicants may be required to provide additional information prior to receiving a CHIPS Incentive Award demonstrating to the CHIPS Program Office’s satisfaction that the covered incentive has been or will be received. See Section IV.I.2 (“Covered Incentive”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

The CHIPS Program Office encourages applicants to secure state and local incentive packages capable of creating spill-over benefits, such as investments in workforce, education, site preparation, or infrastructure (including transit or utilities) that are designed to benefit both the applicant and the broader community. See Section I.C.3 (“Financial Strength”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

The Commercial Fabrication Facilities NOFO requires that “[e]ach applicant must provide a letter from a state or local government entity to demonstrate that they have been offered a qualifying covered incentive, indicating the estimated size and nature of the incentive.”  The purpose of this requirement is to ensure that applicants provide some formal documentation to substantiate the offer and not to impose strict constraints on the documentation’s format.  Accordingly, CPO understands a “letter” broadly to be written correspondence approved or signed by the state or local government entity that includes the offer, which could include a contract or memorandum of understanding.  For more information on what constitutes a covered incentive, please see the answer above to the question “What constitutes a ‘covered incentive’ from a state and local government?”.

It is the applicant’s responsibility to obtain state and local incentives.

Yes, the CHIPS Program Office will take such investments and/or incentives into account. The quality and depth of such commitments will be evaluated per the criteria in Section V.A (“Evaluation Criteria”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

If a single application includes both leading-edge projects and other project types eligible for funding under the first funding opportunity, the application will be considered a leading edge application—and therefore eligible for submission beginning March 31—if at least 75 percent of the application’s cumulative proposed capital expenditures are on leading edge projects.  Applications may not include projects for facilities that are not eligible for funding under this Notice of Funding Opportunity.

Public entities may receive funding as a subrecipient or contractor of an applicant with a demonstrated ability to substantially finance, construct, or expand a facility relating to fabrication, assembly, testing, advanced packaging, or production of semiconductors.

Certain research and development (R&D) facilities may be funded through the first funding opportunity.  

An R&D facility that (1) is co-located with, (2) is under common ownership and control of, (3) is directly and explicably connected to production in, and (4) serves, one or more commercial fabrication facilities eligible and proposed under the first funding opportunity (see Section I.B.1 of the of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity), may be considered part of that facility or those facilities and can be funded with that facility or those facilities under the first funding opportunity. The costs associated with the R&D portion of the facility should be included, and separately identified, in the project model as outlined in Section IV.I.7. “Financial Information” of the first funding opportunity.

Otherwise, an R&D facility that does not meet all four criteria is not eligible for the first funding opportunity.

For a research and development (R&D) facility that (1) is co-located with, (2) is under common ownership and control of, (3) is directly and explicably connected to production in, and (4) serves, one or more commercial fabrication facilities for which the applicant has already applied for funding, the applicant can amend their application by sending an e-mail request to apply@chips.gov.

After the CHIPS Program Office has processed the request, the applicant should be prepared to submit through applications.chips.gov updated narrative materials, timelines, sources and uses, and an amended financial model with costs associated with the R&D portion of the facility included, and separately identified, as outlined in the first funding opportunity (see Section IV.I.7. “Financial Information” of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity).

If the R&D facility does not meet all four criteria, the applicant should await additional guidance under a planned future funding opportunity dedicated to R&D facilities.

There are three types of CHIPS Incentives:

1. Direct Funding from the federal government, which can take the form of grants, cooperative agreements, or other transactions.
2. Loans, which are direct loans from the federal government to the applicant for eligible costs.
3. Loan Guarantees, which are federal guarantees of third-party loans to the applicant for eligible costs.

There is no set maximum for how much a project can receive in CHIPS Incentives.

In determining the CHIPS Direct Funding amount, the CHIPS Program Office will consider the project’s financial model and expected cash flows, the project’s estimated internal rate of return, the strategic importance of the project to U.S. economic resilience and national security, the risks associated with the project, the amount and type of government financial assistance (including state and local incentives and the Advanced Manufacturing Investment Credit (Investment Tax Credit) under 26 U.S.C. § 48D), the availability of program funds, and other factors.

For projects that are eligible for the Investment Tax Credit, the CHIPS Program Office generally expects most CHIPS Direct Funding awards will range between 5% to 15% of project capital expenditures. That range may be higher for projects not eligible for the credit, such as for certain projects related to semiconductor materials facilities.

The CHIPS Program Office generally expects that the total amount of a CHIPS award, inclusive of CHIPS Direct Funding and the principal amount of a CHIPS Loan or CHIPS Loan Guarantee, will not exceed 35% of project capital expenditures. That percentage may be higher if a project is not eligible for the Investment Tax Credit, such as for certain projects related to semiconductor materials facilities.

There is no fixed limit on the CHIPS Loans or Loan Guarantees that an applicant or project may receive.  The CHIPS Program Office will consider multiple factors when determining the amount and features of any CHIPS Loan or CHIPS Loan Guarantee, including the project’s financial model and expected cash flows, the project’s estimated internal rate of return, the strategic importance of the project for U.S. economic resilience and national security, the risks associated with the project, the amount and type of government financial assistance, the availability of program funds, the ability for the project to support the proposed financing from a credit underwriting perspective, and other factors.

The CHIPS Program Office generally expects that the total amount of a CHIPS award, inclusive of CHIPS Direct Funding and the principal amount of a CHIPS Loan or CHIPS Loan Guarantee, will not exceed 35% of project capital expenditures. That percentage may be higher if a project is not eligible for the Investment Tax Credit, such as for certain projects related to semiconductor materials facilities.

Yes, a CHIPS award may include a combination of direct funding (i.e., a grant, cooperative agreement, or other transaction), loans, and loan guarantees.

No. Neither loans nor loan guarantees must be requested in a proposal, though applicants are encouraged to consider loans or loan guarantees as part of an overall package for supporting their projects. Applicants can also seek just loans or loan guarantees, and are not required to seek direct funding.

The specific terms of a CHIPS Loan will be based on the project’s financing requirements and risk characteristics, and the terms and conditions of each CHIPS Loan may be subject to negotiation. The specific terms and conditions of a CHIPS Loan Guarantee will be subject to negotiation with the applicant and the relevant third-party lenders or recipient of such loan guarantee. Applicants must provide a rationale for both the amount and terms of any loans or loan guarantees requested in an application. See Section I.B.8 (“How much support can a project receive in CHIPS Loans or CHIPS Loan Guarantees, and on what terms?”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

Yes. The recipients and amounts of Federal financial assistance awards will be made public.

Yes. Funds made available under the CHIPS Incentives Program may be put only to eligible uses. See Section I.B.6 (“How can CHIPS Incentive funds be used?”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity. 

In addition, funds may not be used to 

• construct, modify, or improve a facility outside of the United States
• physically relocate existing facility infrastructure to another jurisdiction in the United States, unless the project is in the interest of the United States, as determined by the Department of Commerce
• purchase an equity security that is listed on a national securities exchange of an award recipient or to pay dividends or make other capital distributions with respect to the common stock (or equivalent interest) of the recipient or any parent company of such recipient
• pay off any federal direct or guaranteed loan or any other form of federal debt
• fund indirect costs

More information about allowable uses will be provided in the terms and conditions of each award. 

The Investment Tax Credit is a separate incentive administered by the U.S. Department of the Treasury and the Internal Revenue Service that provides a federal income tax credit for qualifying capital investments in a facility for which the primary purpose is the manufacturing of semiconductors or semiconductor manufacturing equipment. The Department of Commerce and the Department of the Treasury are coordinating closely on the Investment Tax Credit and CHIPS funding to ensure these incentives work together to further the Administration’s economic and national security goals. The Department of the Treasury expects to publish guidance addressing the Investment Tax Credit in March, in coordination with guidance published by the Department of Commerce addressing the national security requirements and clawback rules for CHIPS funding. For now, details on the Investment Tax Credit can be found at 26 U.S.C. § 48D.

The CHIPS Program Office expects applicants for CHIPS funding to take advantage of this tax credit, if eligible, to the fullest extent possible. Applicants for CHIPS funding must also detail in their application the support for a project expected from the Investment Tax Credit.

The CHIPS Program Office has not allocated a specific amount of funding to each category of facilities. Each project will be evaluated on its own merits and reviewed in light of the evaluation criteria and prioritization and selection factors detailed in the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity. For more information on the CHIPS Program Office’s investment goals, see the “Vision for Success: Commercial Fabrication Facilities” released in February 2023, and the “Vision for Success: Facilities for Semiconductor Materials and Manufacturing Equipment” released in June 2023.

Consistent with the CHIPS Act, the CHIPS Program Office will dedicate at least $2 billion from the CHIPS Incentives Program to support production of mature nodes. The CHIPS Program Office views the $2 billion requirement as a floor, not a ceiling. In accordance with statutory requirements, the CHIPS Program Office will give priority to applications for mature-node facilities that support the resilience of semiconductor supply chains for critical manufacturing industries (as defined in Section VII.A (“Definitions”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity) in the United States. Applications for mature-node facilities will otherwise be evaluated across the same priorities and criteria applicable to other projects. See Section I.C (“Program Priorities”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

Disbursements of direct funding will be tied to project milestones in connection with both the capital expenditure components of the project and the workforce development and/or operational cost components of the project. The rate of disbursement is generally expected to be proportional to the rate at which non-federal dollars are expended over the course of the project, although determinations will be made on a case-by-case basis. CHIPS Loans will likewise be disbursed in tranches aligned with project milestones.

In general, the CHIPS Program Office will track the performance of each CHIPS incentive award via financial and programmatic reports, in accordance with the award terms and conditions. Usually, reports will be required no less than semi-annually and must be submitted in an electronic format to be specified at the time of the award. For more information, see Section VI.E (“Reporting”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

Commitments will be codified in the terms of an award. The CHIPS Program Office will require regular reporting from award recipients and intends to establish a rigorous compliance and audit program to ensure that these commitments are being upheld. Failure to adhere to the terms of the award may result in one or more of the following actions, as appropriate in the circumstances: the temporary withholding or suspending of payments, the suspension or termination of the award, the return of funds made available under the award, the initiation of suspension or debarment proceedings in accordance with law, or other remedies that may be available.

Recipients receiving more than $150 million in CHIPS Direct Funding will be required to share with the U.S. government a portion of any cash flows or returns that significantly exceed the applicant’s projections above an agreed-upon threshold specified in the award. Upside sharing arrangements will be set on a case-by-case basis and, in exceptional circumstances, may be waived by the Department. 

The CHIPS Program Office wants projects that receive CHIPS funding to succeed and earn robust returns, as this will contribute to the overall health of the U.S. semiconductor industry. As part of its core commitment to protecting taxpayer investments, the CHIPS Program Office must also ensure that the size of the incentives any applicant receives is no larger than necessary to accomplish program goals. To that end, the CHIPS Program Office will work with applicants during the application process to align on a realistic set of assumptions and expectations regarding future cash flows, projections, and returns, which will in turn inform the size of any award. Upside sharing is expected to be material only when projects generate cash flows or returns that significantly exceed the projections that were used to determine the CHIPS Direct Funding amount. Upside sharing will never exceed 75% of a recipient’s direct funding award.

In no case will upside sharing be intended to undermine the commercial viability of a project. Both the applicant and the CHIPS Program Office will work together to agree on a threshold at which upside sharing begins as part of the award process.

This financial structure is common in private sector transactions. The purpose of upside sharing is to align an applicant’s and the U.S. government’s incentives in arriving at a reasonable set of projections for a project, not to regulate the profits that an awardee may receive. Upside sharing is not expected to occur in most projected outcomes for CHIPS-supported projects, as it would be activated only in scenarios where a project’s profits or returns significantly exceed expectations. The Department will use any upside sharing proceeds to support the purposes of the CHIPS Act and strengthen the U.S. semiconductor ecosystem.
 

The Department of Commerce requires that any applicant requesting CHIPS Direct Funding over $150 million provide a plan for access to child care for facility and construction workers. Recipients receiving more than $150 million in CHIPS Direct Funding will also be required to share with the U.S. government a portion of any cash flows or returns that exceed the applicant’s projections above an agreed-upon threshold specified in the award. In both instances, the $150 million threshold applies per application.

The 5% to 15% range mentioned in the CHIPS Incentives Program—Commercial Fabrication Facilities Notice of Funding Opportunity is a general expectation for most CHIPS Incentives awards, not an absolute limit. The range may be higher if a project is not eligible for the Investment Tax Credit, such as for certain projects related to semiconductor materials facilities.

The range is based on internal analysis of industry data and market benchmarks to estimate the amount of direct CHIPS support necessary for a project to achieve commercially reasonable returns, taking into account total government support, inclusive of the Advanced Manufacturing Investment Credit and required state or local incentives. The 5-15% range is specific to this Notice of Funding Opportunity and may not apply for future funding opportunities where the circumstances—including the applicability of the Advanced Manufacturing Investment Credit—may be different.

The CHIPS Program Office recognizes that individual projects are distinct, and is therefore asking applicants for detailed financial information.  We intend to use that information to assess the appropriate level of support on a project-specific basis

For the CHIPS Incentives Program to succeed, the Federal funds must serve as a catalyst to galvanize private, state, and local investment in the semiconductor industry. The Department is focused on the next wave of U.S.-based production, as well as on establishing a virtuous cycle of private-sector investment and innovation that bolsters. U.S. competitiveness in the semiconductor industry.

In order to catalyze private investment, the CHIPS Program Office (CPO) has worked with an external financial advisor to develop a list of potential sources of third-party private capital providers to CHIPS applicants. The list includes a vetted group of institutions and includes specifics on the types of investments they might be seeking and is intended to serve as a resource for CHIPS applicants who meet certain screening criteria related to economic and national security and are likely moving forward in the evaluation process. CPO expects to distribute the list of potential private capital sources to a select group of applicants invited to the full application stage under the first and second notice of funding opportunities.

The list was created following CPO’s public webinar in the Fall of 2023, hosted to educate private financing providers about the CHIPS program’s objectives, the loan and direct incentive program and how private capital providers can support CHIPS applicants. During the webinar, the CHIPS program office announced an open invitation to private capital providers to send indications of interests to be included in the list of potential sources of third-party financing for CHIPS projects. The list of potential private capital sources provided to eligible applicants is intended to be dynamic and updated from time to time as needed. Any potential private capital providers interested in being included may reach out to financialinstitutions@chips.gov and provide applicable information for vetting by the CHIPS office’s external financial advisor.

CPO hosted a public webinar titled “How Can Private Capital Chip In?” to educate private financing providers about the program’s vision, funding opportunities, and how private capital can support program applicants. In the webinar, the CHIPS Investment Office discussed the various ways private investors can support with different financing mechanisms, such as, but not limited to, corporate loans, asset-backed / non-recourse project finance loans, formation of consortia / joint ventures, sale lease-back financing, customer supply agreements backed financing, quasi equity investments, prepay agreements, etc.

Recruiting, training, and retaining a large, skilled, and diverse workforce will be critical to strengthening the U.S. semiconductor ecosystem. Delivering on the program’s national and economic security objectives demands major investments in the semiconductor workforce that will support good-paying jobs across the industry.

Recognizing this, Congress in the CHIPS and Science Act directed the Department to include workforce development requirements in awarding semiconductor incentives. The statute requires that the Department issue awards only to applicants who have “made commitments to worker and community investment” including “training and education benefits paid by the” applicant and “programs to expand employment opportunity for economically disadvantaged individuals.” 15 U.S.C. § 4652(a)(2)(B). The statute also requires funding recipients to “secure[] commitments from regional educational and training entities and institutions of higher education to provide workforce training,” as well as to document and develop a strategy to meet workforce needs.” 15 U.S.C. § 4652(a)(2)(B). Finally, the statute explicitly states that CHIPS funding may be used to support workforce development. See 15 U.S.C. § 4652(a)(4)(B).

Consistent with this statutory mandate, the first funding opportunity requires applicants to submit workforce development plans for the workers who will operate their facilities and the construction workers who will build them.

The CHIPS Program Office has released a workforce development planning guide that offers more details on these requirements as well as other workforce-related provisions in the first funding opportunity, including the requirement for applicants requesting direct funding over $150 million to submit a plan to provide their facility and construction workers with access to child care. A summary of key workforce provisions is available on the CHIPS website.

The first funding opportunity is for projects for the construction, expansion, or modernization of (a) commercial fabrication and packaging facilities in the United States (b) wafer manufacturing facilities, and (c) semiconductor materials and manufacturing equipment facilities for which the capital investment equals or exceeds $300 million. Only projects of the types listed in Section I.B.1 (“What facilities are eligible for funding under this NOFO?”) of the CHIPS Incentives Program—Commercial Fabrication Facilities Notice of Funding Opportunity are eligible. Education and training providers that are not seeking to construct, expand, or modernize an eligible facility are not eligible to apply for funding. 
 
Education and training institutions are, however, encouraged to engage or partner with potential applicants and consider ways to support the commercial viability of potential projects, especially since applicants are required by statute to secure commitments from regional educational and training entities and institutions of higher education to provide workforce training. In addition, funds made available under the CHIPS Incentives Program may support workforce development for a facility, including providing funds to education and training providers. Educational institutions may also consider participating in R&D programs such as the National Semiconductor Technology Center.  

Yes, all laborers and mechanics employed by the applicant, subrecipients, contractors, or subcontractors in the performance of construction, alteration, or repair work funded in whole or in part by CHIPS for America funding must be paid wages at rates not less than those prevailing on similar projects in the locality, as determined by the Secretary of Labor. See Section VI.C.3 (“Davis-Bacon Requirements”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

Applicants requesting CHIPS Direct Funding over $150 million will be required to provide a plan for access to child care for facility and construction workers, e.g., through on- or near-site child care, pre-arranged agreements with existing child care providers, or other measures. To meet families’ needs and expand employment opportunity, child care should be affordable, accessible, reliable, and high-quality. See Section I.C.5.c (“Child care”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

The CHIPS Program Office strongly encourages the use of project labor agreements (PLAs) in connection with construction projects. Applicants that commit to using best-practice project labor agreements will be likely to produce a construction workforce plan that meets the CHIPS Program Office’s criteria.

Applicants that do not commit to using a PLA will be required to submit workforce continuity plans and show that they have taken other measures to reduce the risk of delays in project delivery. See Section IV.I.10.b (“Construction Workforce Plan”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

CHIPS recipients must comply with applicable Federal laws. These Federal laws include labor and employment laws, such as Title VII of the Civil Rights Act of 1964, the Fair Labor Standards Act, the Occupational Safety and Health Act (OSHA), and the National Labor Relations Act (NLRA), the last of which protects employees’ right to bargain collectively and engage in concerted activities for the purpose of workers’ mutual aid or protection. CHIPS recipients are also required by statute to comply with the Davis-Bacon Act for construction activities. The Department of Commerce (the Department) takes violations seriously and will address violations using various tools, which may include stopping disbursements of CHIPS incentives, to ensure compliance with workforce commitments and labor laws. 

In the event of an alleged violation of federal labor laws where another federal enforcement agency has jurisdiction, that agency will investigate the claim with cooperation from the Department as needed or requested. For example, non-compliance with the Fair Labor Standards Act will be investigated and determined by the Department of Labor’s Wage and Hour Division (DOL WHD) and non-compliance with the NLRA will be investigated and determined by the National Labor Relations Board (NLRB) according to each agency’s process. Regarding the NLRA, the Department will consider a violation to have occurred under its awards when an NLRB Administrative Law Judge issues a decision finding that the grant recipient committed an unfair labor practice. If the appropriate enforcement agency finds that the company committed a violation of a labor law, the Department may find the company in default under the award and take appropriate action to ensure compliance. Such action may include the suspension of disbursements until the issue is resolved. 

At the point the Department learns of or is made aware of an alleged violation of labor law – from a worker, a union, or any other party – the portfolio management team will inform the recipient of the allegation and the consequences a violation can have on future disbursements. The Department may ask for additional information and/or seek to verify facts and thereafter refer that complaint and all relevant information to the appropriate enforcement agency. Throughout the process, the Department will aid the enforcement agency in fact-finding if requested and as appropriate. In cases where a complaint gets filed directly with an enforcement agency, that agency will determine at what point during the process to notify the Department. The Department will assist the enforcement agency as appropriate by providing information or asking that the company rectify the situation, if requested by the enforcement agency. 

For potential Davis-Bacon violations, the Department has co-enforcement authority along with DOL WHD. The Department is building a Davis-Bacon compliance program to ensure that recipients of CHIPS funding comply with the law. While the Department will lead on enforcement matters for Davis-Bacon compliance, it will also work closely with DOL WHD to ensure consistent application of Davis-Bacon to award recipients and refer enforcement matters, as appropriate, to DOL WHD. 

Unlike many grant programs, CHIPS funding will be disbursed over time based on the recipient’s completion of project milestones. This disbursement method provides the Department with a contractual mechanism to ensure compliance with award terms, including terms relating to workforce commitments and federal labor law. Failure to comply with these award terms could result in the Department withholding disbursements until the company is back in compliance and therefore have significant economic impact on the recipient until such time as the company has remedied the violation. 

Additionally, recipients of CHIPS funds will be required to make representations regarding compliance with award terms as a condition precedent to each disbursement, including with respect to federal labor laws.  If a recipient is unable to make such representations, the Department has various remedies that may be utilized depending on the nature of the issue, including possibly withholding disbursement of funds, requesting that the company rectify the underlying issue, or referring the case directly to the appropriate enforcement agency. Furthermore, a CHIPS recipient that makes false representations may be subject to criminal penalties for perjury or treble damages under the False Claims Act. 

A worker, their representative, or interested parties may notify the Department of possible labor law violations by emailing askchips@chips.gov or by notifying the appropriate enforcement agency through their standard process.

The Framework is a set of five best practices which semiconductor manufacturing companies that have signed non-binding Preliminary Memoranda of Terms (PMT) may voluntarily adopt to increase participation of women and economically disadvantaged individuals in the construction workforce.

This Framework is part of Secretary Raimondo’s ongoing Million Women in Construction initiative that aims to expand the construction workforce by doubling the number of women in construction over the next decade. 

By voluntarily adopting the Framework, companies plan to work with contractors, trades unions, and other community workforce partners to implement best practices that will expand the construction workforce by increasing the participation of women and economically disadvantaged individuals. 

Companies expect to work closely with contractors and sub-contractors, along with building trades unions and community partners, to develop and implement strategies aimed at carrying out the best practices outlined in the Framework. 

Trades unions are critical partners in delivering a skilled workforce that helps projects be completed successfully and on time. Companies expect to work closely with contractors, unions and community partners to develop strategies to expand access to construction jobs, including union jobs. 

Semiconductor companies may voluntarily adopt this framework to help expand participation in the construction workforce as a way to help ensure that their semiconductor fabrication construction projects have an adequate number of skilled workers to complete projects successfully and on time. As project owners, the semiconductor manufacturing companies that oversee the entirety of any potential CHIPS-funded construction project can play a critical role of setting goals for the contractors and sub-contractors working on their construction projects.

No. Adopting the Framework is not required for CHIPS applicants and companies who have entered into PMTs with the Department of Commerce.

Adopting the Framework is not a requirement for receiving CHIPS funding. The CHIPS Program Office welcomes all companies who enter into a PMT with the Department to adopt the Framework and implement its best practices.

As workforce development is an allowable use of funds under the CHIPS and Science Act of 2022, applicants with PMTs designating funding for workforce development may use those funds to support recruitment, training and retention activities for the construction workforce on the owner’s project. 

The CHIPS Incentives Program strives for the inclusion of minority-owned businesses, veteran-owned businesses, women-owned businesses, and small businesses as part of any funded project. Applicants will be expected to explain how they will address this priority, and strong applications will outline proactive efforts to include such businesses in a project’s construction and production supply chain, as well as robust outreach plans for engaging with minority-owned, veteran-owned, women-owned, and small businesses. Such steps may include, but are not limited to

• ensuring that small, minority-owned, veteran-owned, and women-owned businesses are solicited for construction and production supply chain opportunities
• placing them on solicitation lists
• dividing total requirements, where economically feasible, into smaller tasks or quantities to expand access to participation
• investing in supplier diversity programs
• assigning dedicated staff to manage outreach and data analysis

For more information, see Section I.C.6 (“Broader Impacts”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

As a general matter, foreign companies seeking to invest in the United States can apply for CHIPS Incentives. See Section III.A.1 of the CHIPS Incentives Program–Commercial Fabrication Facilities Notice of Funding Opportunity for more information.

Foreign entities of concern are not eligible to receive CHIPS Incentives. In addition, the Department of Commerce will review applications for involvement of foreign entities of concern and will not approve any applications where a foreign entity of concern—through control, access to information, or other mechanisms—poses an undue risk to a project or U.S. national security interests. A “foreign entity of concern” is defined by statute at 15 U.S.C. § 4651(8). See Section III.A.2 (“Foreign Entities of Concern and Foreign Capital”) of the CHIPS Incentives Program–Commercial Fabrication Facilities Notice of Funding Opportunity.

The Department of Commerce will review applications for involvement of foreign entities of concern and will not approve any applications where a foreign entity of concern—through control, access to information, or other mechanisms—poses an undue risk to a project or U.S. national security interests. A “foreign entity of concern” is defined by statute at 15 U.S.C. § 4651(8).  CHIPS Incentive Awards will also involve requirements to enable identification and mitigation of national security risks posed by involvement of foreign entities of concern that may arise after an application is approved. See Section III.A.2 (“Foreign Entities of Concern and Foreign Capital”) of the CHIPS Incentives Program – Commercial Fabrication Facilities Notice of Funding Opportunity.

To ensure that CHIPS funding does not directly or indirectly benefit foreign countries of concern, the CHIPS and Science Act includes certain limitations on funding recipients, such as prohibiting engagement in certain significant transactions involving the material expansion of semiconductor manufacturing capacity in foreign countries of concern and prohibiting certain joint research or technology licensing efforts with foreign entities of concern.

These limitations prohibit recipients of CHIPS incentives funds from using the funds in other countries; significantly restricts recipients of CHIPS incentives funds from investing in most semiconductor manufacturing in foreign countries of concern for 10 years after the date of award; and limits recipients of CHIPS incentives funds from engaging in joint research or technology licensing efforts with a foreign entity of concern that relates to a technology or product that raises national security concerns.

The Department is issuing, and requesting public comments on, a proposed rule to set forth terms related to these limitations and procedures for funding recipients to notify the Department of any planned significant transactions that may prohibited. Potential applicants should also consult the Department of Treasury’s proposed rules regarding the Advanced Manufacturing Investment Credit.

Applicants for CHIPS Incentives may be subject to a range of federal, state, tribal, and local environmental laws and regulations, depending on the nature and location of the activities for which applicants request or receive funding. Timely satisfaction of environmental and permitting requirements, including environmental reviews under the National Environmental Policy Act (NEPA), are critical to the success of the program. To ensure an efficient and effective environmental review process under NEPA, applicants are strongly encouraged to familiarize themselves with NEPA and ensure that their project teams have the necessary NEPA expertise, which could include hiring companies or consultants that specialize in NEPA. The CHIPS Program Office will require extensive cooperation from applicants throughout the NEPA process.

Learn more about relevant environmental laws and the NEPA process specifically and see the CHIPS Environmental Compliance FAQ and an overview of NEPA and the environmental review (PDF).

The CHIPS Program Office encourages potential applicants to begin preparing for the National Environmental Policy Act (“NEPA”) process as early as possible. The first step for potential applicants is to submit an environmental questionnaire as part of a pre- or full application. The environmental questionnaire will assist the CHIPS Program Office’s Environmental Division in assessing the likely level of NEPA review that will be required for the proposed project. The environmental questionnaire allows the team to work with the applicant to ensure that all required environmental information is available as early as possible, which can help expedite the NEPA review process for potentially successful applications.
 
The environmental questionnaire is available on the CHIPS website. Leading-edge applicants should submit their questionnaire with their pre-application or full application on or after March 31, 2023. Potential applicants for current-generation, mature-node, and back-end production facilities, as well as for wafer manufacturing facilities and for semiconductor materials and manufacturing equipment facilities for which the capital investment equals or exceeds $300 million, are strongly encouraged to submit pre-applications, including an environmental questionnaire, to begin the NEPA process. Pre-applications for current-generation, mature-node, and back-end production facilities will be accepted on a rolling basis beginning May 1, 2023. Pre-applications for semiconductor materials and manufacturing equipment facilities for which the capital investment equals or exceeds $300 million will be accepted on a rolling basis beginning September 1, 2023.

More information about the NEPA process is available here.

Yes. The CHIPS Program Office’s Environmental Division will work with applicants and their third-party contractors in an iterative process to help ensure smooth and expeditious completion of the NEPA review process. In addition to engaging with applicants as part of the evaluation of the environmental questionnaire, the Environmental Division will provide resources, such as webinars, FAQs, and templates, to assist applicants in planning for environmental reviews.