What is CHIPS?

The CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act of 2022 provides $52.7 billion in federal funding to increase semiconductor manufacturing in the U.S. and enhance national security.  

CHIPS provides $39 billion in federal funds to U.S. and foreign-owned companies to build, expand or modernize semiconductor production facilities in the U.S. and to produce new equipment for semiconductor fabrication, assembly, testing, advanced packaging or R&D.

CHIPS includes $11 billion to support research and development in the U.S. for semiconductor and equipment companies, including workforce development programs for their current and future staff.

Who is Eligible? 

Eligible CHIPS applicants include semiconductor and equipment companies planning to invest in new or expanded manufacturing projects and/or research and development in the U.S. American colleges and universities are also eligible to apply for CHIPS funding, as well as public and private workforce training providers.

For San José-Based Businesses

The federal CHIPS application includes a section on state and local government support. For CHIPS projects in San José, companies are advised to contact the California Governor’s Office of Business and Economic Development and the City of San José Office of Economic Development and Cultural Affairs. The U.S. Department of Commerce is now accepting applications for CHIPS commercial fabrication facilities. An announcement for CHIPS research and development and workforce development is expected in fall 2023. The U.S. Treasury Department will administer a 25 percent federal tax credit for CHIPS manufacturing.

The U.S. Department of Commerce has included semiconductor supply chain funding opportunities as part of the CHIPS Act. Potential applicants are able to submit pre-applications to the U.S. Department of Commerce beginning September 1, 2023 and full applications beginning October 23, 2023. A dedicated funding opportunity for smaller projects will be announced later this year. 

In a June 2023 announcement, the U.S. Department of Commerce expanded the scope of the funding opportunity to include projects for the construction, expansion, and modernization of semiconductor materials and manufacturing equipment facilities in which the capital investment exceeds $300 million. The second opportunity will be for capital investments below $300 million. 

For further CHIPS information, please contact Joe Hedges of the City of San José at joe.hedges@sanjoseca.gov. For further workforce development information, please contact Lawrence Thoo of work2future, the City-administered local workforce development board, at lawrence.thoo@sanjoseca.gov.