The Commerce Department has opened the application process for computer chip makers to access $39 billion in government support to build new factories and expand production.
WASHINGTON — The Commerce Department has opened the application process for computer chip manufacturers to access $39 billion in government support to build new factories and expand production.
All companies seeking funding must demonstrate how they plan to develop a local workforce, with companies raising $150 million or more also having to provide affordable and accessible -child care for their workers.
The funding is part of the CHIPS and Science Act, which President Joe Biden signed into law in August. Grants, loans and loan guarantees are intended to revive local production of computer chips.
It focuses on the U.S. sharpening military technology and manufacturing while minimizing the kinds of supply disruptions that occurred in 2021, after the start of the coronavirus pandemic, when a shortage of chips shut down factory assembly lines and fueled inflation.
“This is fundamentally a national security initiative,” Commerce Secretary Gina Raimondo said as the application process began Tuesday. “We don’t write blank checks to any company that asks.”
The money is intended to support private investment in new factories and can be recouped when companies use it to buy back stock. Major companies such as Intel, TSMC, IBM, Micron and Texas Instruments have already launched aggressive expansions tied to support, which amounts to $52 billion when combined with funding for research.
Raimondo said that any company that receives support cannot expand its manufacturing capacity in foreign countries of origin due to national security concerns, a restriction that appears to apply to China. Recipients also cannot partner with companies based in those countries for the purpose of developing advanced technologies.
The Commerce Department said companies could begin submitting their expressions of interest on Tuesday. That is the first step in the process that includes the draft proposal, final proposal and government evaluation of the proposal before the final award arrives.
