Dive Brief:
- The Department of Commerce opened a new round of funding from the CHIPS and Science Act on Friday, this time for small-scale supply chain projects and businesses.
- The $500 million in funds is to construct, expand or modernize facilities related to semiconductor materials and manufacturing equipment.
- Funds are for projects with less than $300 million in total costs, with a focus on granting money to consortiums of manufacturers within the same regions to create local production hubs.
Dive Insight:
The newest round of funding out of the $280 billion CHIPS act, Friday’s announcement is another arm of the U.S. strategy to fortify domestic semiconductor supply chains.
"If we want to make more chips in America, then we need the supply chain for these materials and equipment also in America," Commerce Secretary Gina Raimondo said on a call with reporters Thursday.
Earlier funding rounds were focused on large-scale projects for commercial fabrication facilities for the likes of Intel and Taiwan Semiconductor Manufacturing Company, drawing over 460 applications for domestic semiconductor manufacturing and related projects.
This time, money is specifically for small- and medium-sized businesses producing equipment, chemicals, gasses and other components for chip manufacturing.
As part of the push to bring in smaller companies, the application process is simplified and streamlined to accommodate businesses that may have fewer resources. All applicants will submit a "concept plan" describing their proposed project, but only finalists will submit the more labor intensive full applications, according to the department.
"We spend a lot of time focused on the very biggest companies, you know, Intel and the like, which are important, but the reality is so much of the upstream supply chain and the semiconductor industry are small companies all around the country," Raimondo said.
Three key factors in the review process include a project's ability to strengthen the country's semiconductor supply chain resilience, its advancement of technological leadership and a project's integration into chip fabrication "clusters" to create supply chain ecosystems around the country.
The department is encouraging companies to apply for funding as "consortiums" of suppliers within the same region. Doing so will allow the Commerce Department to better engage local state governments and stakeholders in creating production hubs, according to a senior Department of Commerce official.
"We're asking clusters to come together and consortia and say, 'here are the set of projects that we think we really need for our particular cluster to be successful,'" the official said on a call with reporters.
Project concept plans will be accepted between Dec. 1 and Feb. 1, 2024. Full application submission dates will be communicated to advancing applicants only.
