The Biden administration on Tuesday launched its massive effort to outcompete China in semiconductor manufacturing, offering $39 billion in financial incentives to companies seeking to build manufacturing plants in the United States.
Authorized by the CHIPS and Science Act last year, the Commerce Department opened the application process on Tuesday for companies vying for a share of the funding. This first round prioritizes candidates seeking to build national chip-making facilities that can ensure that billions of taxpayers’ dollars are protected and leveraged to advance US national security objectives.
“When we complete the implementation of CHIPS for America, we will be the premier destination in the world where new, cutting-edge chip architectures can be invented in our research labs, designed for every end-use application, manufactured on a massive scale and packed with the most cutting-edge technology,” Commerce Secretary Gina Raimondo said in a statement on Tuesday.
In a press release Tuesday, the Commerce Department explained how it will evaluate applicants for the first time. Companies requesting more than $150 million in funding will have to provide childcare for construction and factory workers, limit stock buybacks and share part of their profits with the government if they are more profitable than expected. Companies that build these factories should use unionized workers.
“Applications will also be assessed on commercial viability, financial strength, technical feasibility and readiness, workforce development, and efforts to drive inclusive economic growth,” the press release said. “The CHIPS for America awards will be presented as soon as nominations can be rigorously evaluated and negotiated.”
The Biden administration plans to open additional funding rounds this spring and fall to spur investment in chipmaking materials and research facilities. Major chipmakers, like GlobalFoundries and Intel, have already leveraged the industry’s enthusiasm for money to strike new business partnerships and build factories across the United States.
In a statement on Tuesday, Al Thompson, Intel’s vice president for US government relations, welcomed the launch of the program, calling it “an important step in making US semiconductors globally competitive.” world”.
Intel declined to say whether it plans to apply for the funding.
“Not a single public dollar should help executives drive down their stock prices.”
Progressives like Sens. Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) sought to limit share buybacks from companies receiving CHIPS funding during their congressional debate this year. While Commerce Department plans ban subsidies for stock buybacks, lawmakers worry the agency hasn’t gone far enough.
“Leveraging federal funds for manufacturing #CHIPS is critical to supporting workers and protecting taxpayers,” Warren said in a tweet tuesdaybut called the department’s rules “disappointing”.
“Not a single public dollar should help executives drive down their stock prices,” Warren said.
Other Democrats applauded the launch of the program.
“Today’s Notice of Funding Opportunity is a critical step in delivering on the CHIPS and Science Act’s promise to create well-paying jobs right here at home and end our dangerous dependence on foreign-made semiconductors,” Rep. Frank Pallone Jr. (D-NJ) said in a statement Tuesday.
As part of Tuesday’s announcement, the Commerce Department outlined the goals it expects to achieve over the next 10 years in administering the silver. Specifically, the department plans to create two new “large-scale groups” of chipmakers that produce “cutting-edge” memory chips as well as current-generation and mature-node chips.