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Summary Description of the CHIPS and Science Act of 2022

Description of the Act drawn from HR 4346, 117th Congress, 2nd Sess., July 2022 (bill text), https://www.commerce.senate.gov/services/files/CFC99CC6-CE84-4B1A-8BBF-8D2E84BD7965; U.S. Congress, Senate Committee on Commerce Science and Transportation, CHIPS and Science Act of 2022, Division A Summary – CHIPS and ORAN Investment, July 2022, https://www.commerce.senate.gov/services/files/2699CE4B-51A5-4082-9CED-4B6CD912BBC8; U.S. Congress, Senate Committee on Commerce Science and Transportation. Chips and Science Act of 2022, Section-by-Section Summary, July 2022, https://www.commerce.senate.gov/services/files/1201E1CA-73CB-44BB-ADEB-E69634DA9BB9.

Key provisions of the act included the following:

• Manufacturing grants and incentives: $39 billion for financial assistance to construct, expand, or modernize domestic facilities and equipment for semiconductor fabrication, assembly, testing, advanced packaging, or research and development, including $2 billion specifically for legacy semiconductors. Within the incentive program, up to $6 billion may be used for the cost of direct loans and loan guarantees.
• Advanced manufacturing investment tax credit (ITC): In addition to the grant program, the ITC provides a 25 percent investment tax credit for investments in semiconductor manufacturing. The credit covers both manufacturing equipment as well as the construction of semiconductor manufacturing facilities. It also includes incentives for the manufacturing of the specialized tooling equipment required in the semiconductor

manufacturing process. The ITC aims to erase the difference between U.S. and foreign subsidy regimes, and, when paired with the CHIPS grant funding, seeks to reduce the up to 40 percent cost difference for leading-edge semiconductor production.

• Research and development (R&D): $11 billion is for R&D, which will fund a series of program elements.
• National Semiconductor Technology Center (NSTC): A public–private partnership to conduct advanced semiconductor manufacturing R&D and prototyping, invest in new technologies, and expand workforce training and development opportunities. Consortia of industry and universities will compete for the center award.
• National Advanced Packaging Manufacturing Program: A federal R&D program to strengthen advanced assembly, testing, and advanced packaging capabilities.
• Manufacturing USA Semiconductor Institutes: Manufacturing innovation institutes between government, industry, and academia to develop improvements of semiconductor machinery, develop advanced packaging capabilities, and design and disseminate training.
• Microelectronics Metrology R&D: A National Institute of Standards and Technology (NIST) research program for advanced semiconductor measurement science, standards, material characterization, instrumentation, testing, and manufacturing capabilities.
• CHIPS for America Defense Fund with $2 billion for the Department of Defense and the Defense Advanced Research Projects Agency to implement the Microelectronics Commons, a national network for onshore, university-based prototyping, lab-to-fab transition of semiconductor technologies, including defense-unique applications, and semiconductor workforce training.
• Workforce education: $200 million for education and training of the domestic semiconductor workforce, including both the engineering and technical workforce, which face near-term labor shortages, to be led by the National Science Foundation and its education division.
• International collaboration: $500 million for the Department of State, in coordination with the Agency for International Development, the Export-Import Bank, and the U.S. International Development Finance Corporation, to support international information and communications technology security and semiconductor supply chain activities, including supporting the development and adoption of secure and trusted telecommunications technologies, semiconductors, and other emerging technologies. The legislation also directs the Secretary of Commerce to

report on the capabilities of the U.S. industrial base to support national defense needs in light of the global nature of the supply chain and significant interdependencies between the U.S. industrial base and that of foreign countries in microelectronics.

NOTE: These are authorized programs but not all are being funded or fully funded as of this writing.