Department of Commerce keeps moving on semiconductor supply chain program

Companies have until Feb. 1 to apply for federal funds to help build small-scale commercial semiconductor manufacturing facilities. The National Institute for Standards and Technology is administering the funds, which are available as part of the $50 billion CHIPS for America program.

Under the program, the Department of Commerce (DOC) will agree to preliminary terms on a non-binding basis following merit review of an application. The final award phase is contingent upon successful completion of a due diligence phase.

Shortages of microconductors during the COVID-19 pandemic affected more than 1% of global Gross Domestic Product (GDP). To resolve supply chain issues that have hampered semiconductor manufacturing in the United States, the DOC has created two funding opportunities that encourage facility construction.

One seeks applicants who are building commercial facilities or who will spend more than $300 million to build, renovate or expand facilities. The other is for projects with capital investments of less than $300 million.

Last week, the U.S. Department of Commerce and private company Microchip Technology Inc. reached a non-binding preliminary agreement to provide $162 million to be split across two projects: approximately $90 million to modernize and expand a fabrication facility in Colorado Springs, Colorado, and approximately $72 million for an expansion in Gresham, Oregon.

The projects are estimated to nearly triple the output of semiconductors the company produces at these sites, decreasing reliance on foreign companies and strengthening supply chain resilience. It is also expected to create well-paying jobs in construction and manufacturing.

The preliminary agreement is the second of its kind between the Department of Commerce and a private company through the CHIPS and Science Act. The first was awarded in December to BAE Systems Electronic Systems — A $35 million incentives package to help the company replace tools and produce more chips necessary for defense programs that include the F-35 Fighter Jet Program.

^{Strategic Partnerships, Inc.}^{can provide information on contract opportunities, plus existing and future government funding. For more information, contact}^{research@spartnerships.com}^.