The CHIPS for America Fund, also known as the Chips Act, was approved in 2022 as a way to build up the U.S. semiconductor industry, via the issuing of grants and loans to companies in the space. Over a year later, funds may finally get awarded.
The Biden Administration is anticipated to award billions from the $53 billion pool to chip makers including Intel, TSMC, and others to construct factories in the U.S., reports the Wall Street Journal.
Industry executives knowledgable about the negotiations believe some announcements could arrive before the March 7 State of the Union address, in a move designed to show off President Biden’s economic achievements ahead of the main presidential race.
The announcements would be preliminary, with periods of due diligence and final agreements to be made at a later time, and an expectation of fund releases at project milestones.
It is believed over 170 companies have applied to the fund since its inception, but only two small grants have been issued so far.
Among the companies likely to benefit from the fund is TSMC, Apple’s chip partner, which is in the process of constructing two fabrication plants in Arizona, though the second may not open until 2028.
Of the $53 billion, $39 billion is set aside as manufacturing grants that can cover up to 15% of the total cost of a project, up to $3 billion per fab. Loans, loan guarantees, and tax credits also form part of the funding package.