To the extent that the applicant relies on contractors, the CPO expects the applicant to work with those contractors to implement supplier diversity efforts and to collect data on program performance.
Broader impacts
The CPO will evaluate projects based on applicants’ plans to commit to future investment in the U.S. semiconductor industry, including:
- Building R&D facilities in the United States
- Supporting CHIPS R&D programs
- Creating opportunities for minority-owned, veteran-owned, and women-owned businesses
- Demonstrating climate and environmental responsibility
- Invest in their communities by addressing barriers to economic inclusion
- Committing to using domestically produced iron, steel, and construction materials
Application process
Applications for funds released by each NOFO will be accepted on a rolling basis, and considered in the order received. The application process includes the following phases.
Statement of interest
Applicants must briefly describe the proposed project so that the CPO may gauge interest in the program and plan for further review. The CPO began accepting statements of interest on a rolling basis on Feb. 28, 2023. Statements of interest must be submitted at least 21 days before an application.
Regardless which NOFO is applicable to their project, interested businesses should submit a statement of interest as soon as possible.
Optional pre-application
Applicants may choose to submit a more detailed description of their project plans in the form of a pre-application. The CPO will provide written feedback on the pre-application, including recommended next steps, such as, a revised pre-application, a full application, or neither. For most facilities, the CPO began accepting pre-applications on May 1, 2023.
Pre-applications for leading-edge facilities became available beginning March 31, 2023.
Full application
Full applications contain detailed information on the projects, including technical and financial feasibility and alignment with economic and national security objectives, among other criteria. The CPO has published its suggested application templates and materials to its webpage. The CPO may provide feedback or seek further information or clarification from the applicant as part of the process.
Applicants must describe the projects extensively, provide details regarding the amount of secured private funding and state and local incentives, and provide financial information and models with justifications for assumptions.
They must also demonstrate that CHIPS funding will incentivize investment in the United States to a level that wouldn’t occur without the award and describe the activities pertaining to the incentive.
Before moving into the due diligence phase, the CPO will prepare and seek agreement to a non-binding Preliminary Memorandum of Terms, which will include recommendations for the award amount and form and may also include terms related to other strategic objectives.
For most facilities, the CPO began accepting full applications on a rolling basis on June 26, 2023.
Due diligence
If the CPO determines that an applicant is reasonably likely to receive an award — and the CPO and the applicant agree, or foresee agreement, on a non-binding Preliminary Memorandum of Terms — the application will enter the comprehensive due diligence phase.
In this phase, the CPO will require the applicant to provide additional information on national security, financial, environmental, and other issues and will engage, at the applicant’s expense, with outside advisors, consultants, or attorneys to validate the information provided in the application.
Award preparation and issuance
After successfully completing due diligence, the Department of Commerce will prepare and issue an award. Direct funding and loans will ultimately be disbursed in tranches tied to project milestones.
Successful applicants
A successful applicant would need the following:
- Project plan that can reasonably be implemented
- Business plan specifically related to the types of semiconductors to be produced
- Plan to mitigate or combat risks related to supply chain, counterfeiting, and cybersecurity
- Commitments demonstrated to worker and community investment
- Plans for workforce training which leverage strategic partnerships
- Strategy to meet workforce needs
While the application process can be time-consuming, the benefits can be significant.
Other important application details
Note the following details that could prove important to the application process.
Opportunities for feedback
The application process allows opportunities for feedback from the CPO to help gauge the applications viability and alignment with the program’s goals. The statement of interest allows the CPO to gauge initial interest. Completing the optional pre-application could allow an opportunity for the CPO to provide valuable, written feedback on how to improve the application.
State and local incentives
Successful applicants must also demonstrate the state or local tax incentives the company has secured and how those programs will benefit the project. Many states are preparing programs to accept applications for projects related to the CHIPS Act.
Locating eligible facilities is part of the site selection process, which makes that analysis an important factor to include in the application.
Knowledge sharing
The CPO has indicated that applicants should participate in the National Semiconductor Technology Center (NSTC), which will conduct research and prototyping of advanced semiconductor technology.
Applicants may then be asked to engage, support, and collaborate with projects funded by the National Advanced Packaging Manufacturing Program (NAPMP), which will strengthen capabilities for semiconductor advanced testing, assembly, and packaging in the domestic ecosystem.
Notice of funding opportunities (NOFOs)
First NOFO
The CPO’s first funding opportunity seeks applications for projects for the construction, expansion, or modernization of commercial facilities for the fabrication of leading-edge, current-generation, and mature-node semiconductors. The following types of projects are eligible for funding under the current NOFO.
Leading edge
These are projects using the most advanced technology and creating the products most critical to enhancing U.S. competitiveness. This includes the most advanced front-end production processes, which currently includes facilities that use extreme ultraviolet (EUV) lithography tools for logic chips and facilities that can produce 3D NAND flash chips with at least 200 layers or dynamic rapid access memory (DRAM) chips with a half-pith of 13 nanometers or less.
Current generation and mature node
This refers to the production of chips vital to automobiles, aerospace, defense, and other critical infrastructure, which may also include manufacturing processes that can be converted to make other types of chips in times of disruption.
This includes facilities that produce:
- Logic and analog chips that aren’t based on sub-28 nanometer transistor architectures
- Discrete semiconductor devices
- Optoelectronics and optical semiconductors
- Sensors
Back-end packaging
This includes advanced packaging, including assembly, testing, and packaging activities for semiconductors that have completed the front-end fabrication process.
Amendment and expansion of first NOFO
The CPO expanded the first NOFO to accept applications for the construction, expansion, or modernization of commercial facilities for semiconductor materials and manufacturing equipment, for which the capital investment equals or exceeds $300 million on June 23, 2023.
The funding opportunity is an expansion of the department’s first NOFO for commercial fabrication facilities and follows the same application process described above.
Applicants will be evaluated primarily on how well they demonstrate the ability to meet the program’s economic and national security objectives. Additional evaluation criteria include commercial viability, financial strength, project technical feasibility and readiness, and workforce development.
Second NOFO
A second funding opportunity was announced in September 2023 for materials and manufacturing equipment facilities with capital investments below $300 million. Concept papers (similar, but more detailed than statements of interest) were due on Feb. 1, 2024.
Third NOFO
A NOFO supporting the construction of semiconductor R&D facilities, was released in April 2024. This NOFO was aimed at R&D activities that planned to establish and accelerate domestic capacity for advanced packaging substrates and substrate materials, a key technology for manufacturing semiconductors.
This NOFO is allocated approximately $300 million in funding to innovation projects across multiple technologies ranging from semiconductor-based to glass and organics.
