U.S. Allocates $500M for Small Businesses in Semiconductor Supply Chain
The latest funding round from the $280 billion CHIPS Act, announced on September 29, is a pivotal step in the U.S. government’s ongoing efforts to bolster the domestic semiconductor supply chain. Commerce Secretary Gina Raimondo emphasized the importance of ensuring that the materials and equipment supply chain for semiconductor manufacturing is also located within the United States.
Previous funding rounds primarily focused on large-scale projects, including commercial fabrication facilities for major players such as Intel and Taiwan Semiconductor Manufacturing Company. These rounds attracted over 460 applications related to domestic semiconductor manufacturing and associated projects. In this round, the allocation of funds is specifically designated for small- and medium-sized businesses engaged in producing equipment, chemicals, gases, and other components essential for chip manufacturing.
As part of an initiative to engage smaller companies, the application process has been simplified and streamlined to accommodate businesses with limited resources. All applicants will initially submit a “concept plan” outlining their proposed projects, with only finalists proceeding to the more detailed full application stage.
Commerce Secretary Raimondo acknowledged the significance of supporting not only the major corporations like Intel but also the numerous small businesses contributing to the semiconductor supply chain across the United States.
The review process for allocating funds considers three key factors: a project’s potential to enhance the resilience of the country’s semiconductor supply chain, its contribution to technological leadership, and its integration into “clusters” of chip fabrication to establish supply chain ecosystems nationwide.
The Department of Commerce encourages companies to apply for funding as regional “consortiums” of suppliers. This approach aims to facilitate collaboration with local governments and stakeholders to create semiconductor production hubs. Project concept plans can be submitted between December 1 and February 1, 2024, with full application submission dates provided exclusively to advancing applicants.