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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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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