Title: Over 460 Companies Compete for Semiconductor Subsidies under Biden’s “Chips for America” Legislation
More than 460 companies have expressed keen interest in winning the government semiconductor subsidy funding, according to the U.S. Commerce Department. This surge in applications comes after President Joe Biden signed the “Chips for America” legislation, allocating a staggering $52.7 billion in subsidies to boost U.S. semiconductor production, research, and workforce development.
Over the past year, companies have already committed $166 billion towards semiconductors and electronics manufacturing. President Biden believes that this massive investment will lay the foundations for America to become a global leader in semiconductor manufacturing.
Although the Commerce Department began accepting applications for the $39 billion subsidy program in June, the final awards have not been issued as of yet. However, the department is making significant strides and expects to announce major progress in the coming months, indicating that funds will soon be dispersed to the deserving companies.
The “Chips for America” legislation also encompasses a 25% investment tax credit, amounting to a value of approximately $24 billion, for companies establishing their own chip plants. This incentive aims to further bolster domestic semiconductor production.
In addition to safeguarding against China benefiting from U.S. funding, the Commerce Department has included certain conditions for companies seeking subsidies. These conditions require companies to provide access to affordable high-quality childcare for their employees and share excess profits, adding a social responsibility aspect to the process.
Sources predict that funding awards will likely range between 5% and 15% of project capital expenditures, ensuring that companies are incentivized to invest in the semiconductor industry. However, the total award amounts are not expected to exceed 35% of project capital expenditures.
To facilitate advanced semiconductor manufacturing research and development, the legislation has allocated $11 billion. Of this amount, a significant portion will be dedicated to establishing the National Semiconductor Technology Center, although the location of this center is yet to be determined.
Discussions are currently underway to identify the optimal location for the center, which will integrate research and development efforts across the entire semiconductor ecosystem. Once established, the center will play a pivotal role in advancing technology and training the semiconductor workforce, further solidifying America as a leader in the field.
As the Commerce Department moves swiftly to assess the multitude of applications, it is evident that the “Chips for America” legislation has sparked immense interest in the semiconductor industry. With a renewed focus on domestic production and research, the United States is taking significant steps to secure its position in the global semiconductor market.