President Biden signed off on the CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act in August 2022. This action makes way for an enormous investment, totaling around $52.7 billion, for the development and manufacturing of semiconductor-related products. However, as with all seemingly free funds, theres a mounting of criteria to meet before being accepted. There is a rigorous application process, and the Secretary of Commerce will make all decisions on how to split available funds. Further, businesses will be subject to scrutiny from countless government bodies. Throughout this article, we will take a look at how to apply for funding and how to protect your business after being approved.
CHIPS Funding Criteria
Theres no such thing as a free picnic, which is why theres a long list of criteria a business needs to fit before it can place a bid for funding. Here is a list of criteria and required documentation:
- A plan for sustaining a facility without federal assistance.
- Proven documentation for expanding or modernizing.
- Target audience analysis of the applicants customer base.
- Information on which area of semi-conductor research or development youd like funding for.
- A plan for avoiding security risks within supply chains and for avoiding counterfeiting.
- Approval for expanding or building a facility within the state.
- Commitments to training and safeguarding employees.
As well as meeting the criteria above, bidding applicants must outline reasons why the project is of benefit to the United States. To find out more about the CHIPS Act, follow the link.
Signing Your Life Away
Before making a bid, you need to be fully aware of the T&Cs, which spread further than the application criteria outlined above. Projects funded by the CHIPS act need to benefit America and take place domestically. Unfortunately, this means that funding can be withdrawn if the recipient is found to have collaborated in research or tech licensing with any foreign entity.
When the funding is granted, businesses must sign 10-year agreements with the Secretary that promise not to expand any part of their business overseas including China. There are exceptions to this ruling. For example, if youre manufacturing old chipsets overseas, there will be zero sanctions imposed.
Government Involvement and Scrutiny
Receiving funds through the CHIPS Act holds obvious benefits, and will help to make America more independent within the tech world. However, managing such high government assets means facing increased scrutiny from the likes of the Department of Defense. As well as federal scrutiny, Congress will likely be involved throughout the project duration to ensure their assets are being spent correctly.
To keep your business safe after being accepted for CHIPS funding, make sure you understand all the conditions. If you need support, have an attorney take a look at your project plans and proposed operations. After all, if youre sanctioned to pay the funding back in full, it may spell the end for your business.
The CHIPS and Science Act will benefit American semiconductor businesses over a long period. Before applying, make sure you understand every condition attached to the receipt of funds.