President Biden Signs CHIPS-Plus Package into Law

August 3, 2022

Appearing virtually, on Tuesday, Aug. 2, President Biden signed into law the $280 billion CHIPS-Plus Act, legislation intended to significantly boost domestic semiconductor production, plus authorize scientific research for the next ten years. 

The law provides mandatory appropriations over five years that would designate and establish the “CHIPS for America Fund.” Specifically, the legislation would designate: $39 billion in “financial assistance to build, expand or modernize” domestic semiconductor facilities; up to $6 billion of that can be used in direct loans or loan guarantees; another $11 billion will go toward advanced research and development programs under the Commerce Department; and $2 billion will be used for national defense tech applications or workforce training.  There are “guardrails” included in the legislation, and none of these funds can be used to underwrite stock buybacks or on facilities in China or “any other foreign country of concern.”

Meanwhile, the science provisions include funding authorizations for the National Science Foundation, Energy Department Office of Science, as well as provisions impacting NASA.  The proposal authorizes more than $80 billion for the National Science Foundation – nearly doubling the agency’s current budget – as well as $10 billion for “regional technology hubs.”  

The centerpiece of small business opportunities in the bill is more than $50 billion in subsidies for domestic semiconductor manufacturing and research. Unfortunately, much-needed legislation to reauthorize the highly successful Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs was scrapped from the larger package initially considered by the House. Absent Congressional action, both programs will expire on Sept. 30.

There is also funding for more advanced research and high-tech manufacturing programs under the National Institute of Standards and Technology (NIST), the Energy Department would be authorized to use billions for advanced research programs in a variety of areas, including fusion and lasers, and Congress will provide funding for STEM programs and research grants through this legislation.

According to supporters, the CHIPS-plus package is vital for U.S. economic and national security interests in a world increasingly dependent on technological advancement, with the Congressional Budget Office estimating the legislation to cost the U.S. nearly $80 billion over the next decade.

Senators ultimately agreed to include tax incentives that were not part of broader, previously considered versions of the legislation, including a multi-year, 25 percent investment tax credit for semiconductor plants estimated to cost $24 billion; however, the bill passed by Congress is a slimmed down version of a larger China competitiveness bill the Biden Administration hoped Congress would pass.  With Republican spending concerns, irreconcilable strongholds between the parties, and August recess just around the corner, the CHIPS-plus bill was born. 

Read NSBA’s previous coverage of the CHIPS-Plus journey and package here and here.