On August 9, 2022, President Biden signed the CHIPS and Science Act of 2022 (H.R. 4346) (also known as CHIPS+) into law. The final legislation represents a compromise, coming together following six months of efforts to reconcile differences between the Senate-passed US Innovation and Competition Act (USICA) (S. 1260) and the House-passed America COMPETES Act (COMPETES) (H.R. 4521). As a result, the CHIPS and Science Act includes modified versions of several popular provisions included in the USICA and COMPETES packages. Two of the most prominent of these programs are a $52.7 billion funding program of semiconductor incentives and a 25 percent tax credit for certain investments in semiconductor manufacturing in the United States. As discussed in our previous Advisory, both programs include "guardrail" provisions to deter participants from making semiconductor-related investments in China.
We note that, while this is the biggest grant program the Commerce Department has ever been tasked to implement, there is also tremendous pressure from stakeholders and political leadership to implement the program as soon as possible. Even prior to passage of the legislation, in January 2022, the Commerce Department issued a request for information on how the program should be structured. Now that the Department has the funding needed to implement the program, we expect the Department to move quickly. Although the Commerce Department has not provided an implementation timeline, other recent grant programs suggest that the grant application requirements will be released by the beginning of February 2023, with initial applications eligible for review roughly sixty days thereafter, or in early April 2023. These estimates remain speculative until the Commerce Department provides further notice.
Our public policy and lobbying team, working with colleagues in our semiconductor group, has been actively involved with the legislative initiative behind CHIPS+ since 2020, actively engaging with members of Congress, senior White House staff, and key members of the Department of Commerce. We can help potential CHIPS Fund applicants take the steps necessary to best position their potential applications.
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