June 30, 2023
The US Division of Commerce’s (Commerce’s) Nationwide Institute of Requirements and Know-how (NIST) launched on June 23, 2023 the second Discover of Funding Alternative (NOFO) for the “CHIPS for America” incentive program (CHIPS Program). This second funding alternative is for semiconductor supplies and manufacturing tools initiatives requiring a greater than $300 million capital funding.
Along with supporting investments in business services in the USA for the front- and back-end fabrication of modern, current-generation, and mature-node semiconductors, coated within the first NOFO, the second NOFO seeks functions for direct funding, loans, and mortgage ensures that may help investments within the development, growth, and modernization of (1) business services in the USA for wafer manufacturing and (2) business services in the USA for supplies used to fabricate semiconductors and semiconductor manufacturing tools, offered that the capital funding equals or exceeds $300 million.
In line with the second NOFO, NIST will launch at a later date a separate course of for initiatives under that threshold.
Because the publication of the primary NOFO, potential candidates demonstrated widespread curiosity within the CHIPS Program. The Division has obtained almost 400 statements of curiosity from corporations all over the world, masking initiatives throughout 37 states. The publication of the second NOFO additionally units the stage for the Biden administration’s Investing in America tour, throughout which Commerce Secretary Gina Raimondo and different administration officers will journey to greater than 20 states to focus on investments, jobs, and financial alternatives pushed by the Investing in America agenda and the implementation of related laws, together with the CHIPS and Science Act.
Alongside the second NOFO, Commerce additionally shared its Vision for Success that outlines strategic objectives for funding within the semiconductor provide chain, highlighting its objective of (1) strengthening provide chain resilience, (2) selling US technological management, and (3) supporting thriving US fab clusters, together with by making certain that every CHIPS-funded cluster is supported by an ecosystem of dependable suppliers.
When making use of for the CHIPS Program funding, candidates ought to preserve these objectives in thoughts to be aggressive and to help Commerce in making certain that CHIPS funding is used as effectively and successfully as potential throughout the semiconductor ecosystem.
Funding Alternative Overview
The second NOFO largely builds on the first NOFO, and is printed within the type of an modification. Commerce reiterates that it goals to strengthen US financial and nationwide safety, together with financial resilience and competitiveness, in addition to lay the groundwork for long-term development and financial sustainability within the US semiconductor business and promote safe and resilient provide chains.
Candidates for the second NOFO will adhere to the identical five-step software methodology specified within the first NOFO, which methodology entails a press release of curiosity, pre-application (elective however really useful), full software, due diligence, and closing award issuance and preparation.
Of the six program precedence areas that candidates should tackle, functions will primarily be evaluated on the extent to which they fulfill this system’s financial and nationwide safety targets. The opposite 5 program precedence areas that shall be thought of are business viability, monetary energy, technical feasibility and readiness of the venture, workforce growth, and broader impacts.
Our earlier coverage of the first NOFO accommodates extra particulars relating to the appliance course of, analysis standards, award varieties, and disbursement schedule.
The second NOFO continues to offer funding for “coated entities,” a time period that features non-public entities or consortia of personal and public entities that may reveal the flexibility to considerably finance, assemble, develop, or modernize a facility in the USA, referring to the fabrication, meeting, testing, superior packaging, or manufacturing of semiconductors, supplies used to fabricate semiconductors, or semiconductor manufacturing tools.
An applicant should reveal how the requested CHIPS incentives will facilitate the flexibility of the applicant to make investments in services and tools in the USA that will not in any other case happen.
Beneath the second NOFO, funding have to be for the development, growth, or modernization of (1) business services in the USA for the front- and back-end fabrication of modern, current-generation, and mature-node semiconductors; (2) business services in the USA for wafer manufacturing; or (3) business services in the USA for supplies used to fabricate semiconductors and semiconductor manufacturing tools, offered that the capital funding equals or exceeds $300 million. As well as, the coated entity should have a documented curiosity in developing, increasing, or modernizing an eligible facility.
The second NOFO gives definitions of a number of key phrases referring to semiconductor supplies and semiconductor manufacturing tools, together with the next:
- Wafer Manufacturing Amenities means services for the high-volume manufacturing of semiconductor wafers, together with wafers made out of silicon, silicon carbide, and gallium nitride. These services are the websites of ingot manufacturing and wafer slicing, lapping, sprucing, cleansing, and inspection.
- Semiconductor Supplies Amenities means services for the manufacture or manufacturing, together with development or extraction, of supplies used to fabricate semiconductors, that are the chemical substances, gases, uncooked and intermediate supplies, and different consumables utilized in semiconductor manufacturing. Particular examples of semiconductor supplies given by Commerce embrace polysilicon; photoresists and ancillaries (builders, strippers, litho solvents, and anti-reflective and hardmask layers); sputter targets (together with tantalum, titanium, and aluminum); and supplies particularly utilized in quantum info programs (similar to hafnium and niobium).
- Semiconductor Manufacturing Tools Amenities means services for the bodily manufacturing of specialised tools integral to the manufacturing of semiconductors and subsystems that allow or are included into the manufacturing tools. Particular examples given by Commerce embrace deposition tools similar to chemical vapor deposition, bodily vapor deposition, and atomic layer deposition; etching tools (moist etch, dry etch); lithography tools (steppers, scanners, excessive ultraviolet); wafer slicing tools, wafer dicing tools, and wire bonders; inspection and measuring tools, together with scanning electron microscopes, atomic drive microscopes, optical inspection programs, and wafer probes; sure metrology and inspection programs; and ion implantation and diffusion/oxidation furnaces.
Key Dates (As of Publication Date)
- For modern business services: Each pre-applications (elective however really useful) and full functions are already being accepted on a rolling foundation.
- For current-generation, mature-node, and back-end manufacturing services: Pre-applications (elective however really useful) are already being accepted on a rolling foundation, and Commerce not too long ago started accepting full functions on a rolling foundation on June 26, 2023.
- For wafer manufacturing services: Pre-applications (elective however really useful) shall be accepted on a rolling foundation beginning September 1, 2023, and full functions shall be accepted on a rolling foundation beginning October 23, 2023.
- For semiconductor supplies and manufacturing tools services for which the capital funding equals or exceeds $300 million: Pre-applications (elective however really useful) shall be accepted on a rolling foundation beginning September 1, 2023, and full functions shall be accepted on a rolling foundation beginning October 23, 2023.
- For all potential candidates: The Division continues to simply accept statements of curiosity on a rolling foundation to additional inform the federal government of potential candidates’ curiosity and probably facilitate extra environment friendly software evaluation.
An extra funding alternative shall be launched at a later date for provider initiatives under the $300 million threshold with a tailor-made software that smaller companies can navigate. For business R&D services, Commerce will subsequently launch a separate funding alternative with particulars on the appliance course of and timeline. As well as, Commerce has emphasised its plan to prioritize strong worldwide engagement with like-minded companions to strengthen and diversify the worldwide semiconductor provide chain.
Commerce’s CHIPS-related worldwide engagement to this point has included engagements with the Republic of Korea, Japan, India, and the UK, and thru the Indo-Pacific Financial Framework, European Union-United States Commerce and Know-how Council, and North America Leaders’ Summit.
Suggestions and Conclusion
As a result of excessive stage of curiosity and the restricted funding out there, candidates ought to be aware of the parameters and deadlines established by Commerce. Because the funding functions are accepted on a rolling foundation, potential candidates considering receiving CHIPS Program funding ought to endeavor to organize the appliance materials as quickly as potential. Candidates ought to make sturdy, evidence-backed requests for funding that reveal, intimately, how the specified venture furthers the targets of the CHIPS and Science Act.
Provided that the principal goal of the CHIPS Program, as acknowledged by Commerce, is to advance US financial and nationwide safety pursuits, candidates ought to emphasize how their initiatives align with these targets, together with demonstrating a dedication to long-term funding in the USA.
As an example, candidates are anticipated to initially assess their present organizational and venture cybersecurity practices, reveal a possible plan to make sure the availability chain safety and resilience of the proposed venture, and proactively tackle any overseas entity that may train management over the applicant or a proposed venture or has entry to confidential details about the proposed venture.
We strongly suggest that to be able to be as aggressive as potential, given the restricted funding out there, candidates be certain that their proposals are knowledgeable by a deep and nuanced understanding of US industrial coverage and of how the US authorities assesses nationwide safety threat posed by overseas adversaries’ efforts to focus on and exploit corporations within the semiconductor house.