Deadline approaches for CHIPS act second NOFO for smaller-scale projects

Under the Creating Helpful Incentives to Produce Semiconductors for America and Science Act of 2022 (CHIPS Act), the U.S. Department of Commerce is currently accepting project concept plan submissions from small-scale suppliers through its application portal through Feb. 1, 2024. This is the second CHIPS Incentive Program Notice of Funding Opportunity (NOFO).

Second CHIPS act NOFO priorities

This NOFO is specifically designed for smaller-scale projects, with capital investment below $300 million, that involve constructing, expanding, or modernizing semiconductor materials and manufacturing equipment facilities.

The CHIPS Program Office (CPO) has reserved up to $500 million under this NOFO and expects that funding awards will typically be 10% of a project’s capital expenditures and cap at 30%.

The CPO has laid out three overarching economic and national security objectives for investments in semiconductor materials and manufacturing equipment facilities:

• Support vibrant U.S. clusters that bring together fabrication plants, suppliers, and a diverse, skilled workforce
• Strengthen supply chain resilience
• Advance U.S. technology leadership in semiconductor materials and manufacturing equipment

U.S. semiconductor cluster support

This NOFO is focused on applications that advance clusters by closing critical gaps in the U.S. supplier landscape. If a project doesn’t support a cluster, the application must make a compelling case for advancing one of the Department of Commerce’s other two objectives.

Encouragement to apply within a consortium

The CPO recommends that projects supporting U.S. fabrication form clusters consider applying as part of a consortium that promotes the development and sustainability of semiconductor clusters. The CPO outlines an example of successful consortia to include at least two suppliers, a state or local government entity, and an anchor institution such as a semiconductor fabricator.

Other members may include workforce training providers, labor unions, economic development corporations, institutions of higher education, philanthropic foundations, industry organizations, or other relevant entities.

Application process