The Commerce Department unveiled its plan to implement the CHIPS Act, an initiative intended to subsidize the semiconductor industry, on Tuesday, but the department’s plans include several conditions that advance key Democratic priorities.
The CHIPS Act includes $39 billion in direct funding for chip manufacturers to increase production of semiconductors in the United States. However, the Commerce Department stipulated conditions requiring companies to provide affordable childcare for employees among other expenses for any chip makers applying for more than $150 million in direct federal aid, according to a Commerce Department fact sheet released Tuesday.
These demands weren’t specified in the CHIPS Act but by the Department of Commerce; the department’s secretary, Gina Raimondo, said they will assist companies in luring women to fill vacant jobs, stating chip manufacturers “will not be successful unless you find a way to attract, train, put to work and retain women, and you won’t do that without child care,” according to The New York Times.
WASHINGTON, DC – JULY 25: U.S. Secretary of Commerce Gina Raimondo listens as U.S. President Joe Biden participates virtually in a meeting on the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, in the South Court Auditorium at the White House on July 25, 2022 in Washington, DC. (Photo by Anna Moneymaker/Getty Images)
The fact sheet states that the Commerce Department will evaluate applications for grants based on how the applicant creates “opportunities for Americans from historically underserved communities, including people of color, people from rural communities, veterans, and women.”
“The Department will look at whether applicants commit to future investments in the U.S. semiconductor industry, support R&D programs, and create opportunities for minority-owned, veteran-owned, women-owned, and small businesses,” the Commerce Department said in its press release. “Applicants will also be assessed based on whether they demonstrate environmental responsibility and invest in their community.”
Moreover, workers on CHIPS-funded projects are required to receive salaries that are equal or greater than those being received on similar projects around the location, according to the fact sheet.
The investments are an effort to help re-shore American chip manufacturing, as many United States companies had moved their chip manufacturing/fabrication to Asia to save money; chip production costs 50% more in the U.S. than in Taiwan, according to TSMC founder Morris Chang. (RELATED: Taiwanese Chip Giant Invests $30 Billion In Arizona Ahead Of Biden Visit)
While the CHIPS Act is expected to contribute to increased U.S. chip production, the incentives included in the act will only have the capability to increase the U.S.’s market share of global chip capacity by just under 1%, according to Goldman Sachs Research.
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