Innovation Lightbulb: What's Left of the CHIPS Act Funds?

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In the first few months of 2024, the CHIPS Program Office has announced a flurry of preliminary memoranda of terms (PMTs) with major semiconductor manufacturing firms. As of this writing, eight awards have been announced, ranging from $35 million to $8.5 billion. This week, we look at the status of the CHIPS Act Semiconductor Financial Assistance Program.

Of the $38.22 billion* available, roughly $29.3 billion has been committed, leaving 23 percent of the funds (just under $9 billion) unallocated.

The largest recipients of the CHIPS Act awards so far are the leading-edge chipmakers Intel, TSMC, Samsung, and Micron. The CHIPS Office has stated previously they intend to invest $28 billion of the fund in this segment of the industry, a target they have now reached.

The CHIPS Act mandates a set-aside of $2 billion for projects focused on the production, packaging, or testing of chips manufactured at “mature” technology nodes, a number the CHIPS Office sees as “a floor, not a ceiling.” The first three awards to BAE Systems ($35 million), Microchip Technology ($162 million), and Global Foundries ($1.5 billion) will increase onshore production of current-generation and mature node semiconductors which power a plethora of foundational technologies across the digital economy, including those with defense and automotive applications.

Preliminary Memoranda of Terms, as the name suggests, are preliminary. The Department of Commerce is now conducting the due diligence work on each of these awards, and the actual distribution of funds will be subject to the completion of project deliverables.

As for future announcements, small-scale materials suppliers and equipment manufacturers seeking awards below $300 million have a pot of up to $500 million to apply for. The bulk of the remaining $8 billion will necessarily go towards current-generation and mature-node manufacturers for which the CHIPS Office has yet to reach their $2 billion “floor”.

*The total semiconductor incentives program as appropriated by the CHIPS and Science Act is $39 billion.

The Act allocates 2 percent of the fund ($780,000,000) to cover CHIPS Program Office administrative costs, salaries, expenses, and oversight by the Office of the Inspector General as well as $2,300,000 to fund a study on the U.S. microelectronics industrial base which can be found here.

In addition to direct grants, the Act authorizes up to $75 billion in direct loans or loan guarantees, of which just over $25 billion has been allocated across the various awards as of this writing.

These are figures not represented in the data visualization.

Also not represented is the 25 percent advanced manufacturing investment tax credit implemented by the Department of the Treasury.

Data visualization by William Taylor

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Gregory Arcuri
Program Manager and Research Associate, Renewing American Innovation Project