For companies that wish to receive manufacturing incentives in connection with the CHIPS and Science Act, the newly created CHIPS Program Office (CPO) at the U.S. Department of Commerce will begin accepting applications this spring.
In order to benefit from this funding opportunity, the CPO has created a five-part application process, which includes submitting the applicant organization's interest in the program and demonstrating how the applicant's project will strengthen American manufacturing production and contribute to the long-term national goals of the semiconductor industry. The process also outlines the transparency and due diligence requirements all recipients will need to comply with to remain eligible for federal grants, loans, and loan guarantees. In addition, the CPO has released an Environmental Questionnaire for applicants to use in their preparation.
Stage 1: Submit a Statement of Interest (SOI)
- The CPO is accepting SOIs now.
- An SOI is required for any company that wishes to submit a pre-application or full application.
- Potential applicants must briefly describe the proposed project to assist the CPO in gauging subscription interest in the program and preparing for follow-up reviews with interested companies and projects.
- While the current opportunity for applications is only open to commercial fabricators, the CPO is encouraging suppliers and companies performing or supporting research and development in the manufacturing space to submit an SOI at this time as well. Subsequent program offerings for suppliers and those engaging in research are expected to launch later this year. Applying in advance of this launch is likely to be beneficial to supplier and research candidates.
Stage 2: Submit a Pre-application (optional)
- Pre-applications for leading-edge manufacturers only will be accepted starting March 31, 2023.
- Pre-applications for current generation, mature node, and back-end manufacturers will be accepted starting May 1, 2023. Potential applicants can submit a more detailed pre-application project description of their early plans for CHIPS funding. As part of the pre-application process, the CPO will provide written feedback on the pre-application and recommendations (e.g., whether the applicant should submit revisions or proceed to a full application).
- Pre-applications should include National Environmental Protect Act (NEPA) statements as well as answers to the CPO Environmental Questionnaire. The earliest date for accepting pre-applications is March 31, 2023, and continuing thereafter on a rolling basis.
Stage 3: Submit a Full Application
- Full applications for leading-edge manufacturers only will be accepted starting March 31, 2023.
- Full applications for current generation, mature node, and back-end manufacturers will be accepted starting June 26, 2023.
- Applicants can submit a full application that contains detailed information on the project, including any feedback received from the CPO pre-application correspondence, detailing the full scope of technical and financial feasibility for the project along with narrative details illustrating the project's alignment with CHIPS Act economic and national security objectives.
- The CPO may continue to provide feedback and work with applicants to seek further information.
- If the CPO agrees the application should move forward, the applicant and the CPO will prepare a non-binding Preliminary Memorandum of Terms, including further guidance on the type and amount of any award, and additional terms related to the CHIPS Act's national objectives such as workforce development.
Stage 4: Due Diligence
- Once the CPO decides that an award is reasonably likely for the applicant, and the applicant agrees to a non-binding Preliminary Memorandum of Terms, the project application will enter a robust and comprehensive due diligence phase.
- Due diligence requires additional information to be provided by the applicant and at the applicant's expense. Such information includes details related to national security, supply chain stability, the project's long-term financial structure, environmental remediation or permitting, and other issues with application verification to be conducted by outside advisors, consultants and/or attorneys.
Stage 5: Project Award
- At the completion of the due diligence phase, the CPO will prepare and issue awards.
- Depending on the structure of the project and agreement by the CPO and the applicant, awarded funds may be released according to project benchmarks and/or project milestones throughout the agreed-upon term(s).
Companies seeking funding or exploring projects that are potentially eligible should begin their application process now; however, each stage includes a variety of legal considerations that should be addressed before moving forward. Calfee's diverse set of attorneys and government relations professionals are well-prepared to assist client applicants pursuing CHIPS Act funding. In addition to navigating federal programming and relations with federal and state agencies, Calfee has many practitioners whose subject-matter expertise and long-standing relationships can support projects across the semiconductor supply chain.
We regularly assist clients with structuring their financial arrangements including state and local incentives, leveraging private capital as well as navigating federal tax credits, such as those created by the CHIPS Act. Our Environmental Law group offers questionnaire assistance and NEPA compliance advice and has significant experience providing state and local permitting guidance. Calfee's Intellectual Property group counsels clients across the semiconductor supply chain and helps develop and protect their intellectual property. Our IP group is particularly well-experienced in developing successful IP strategies for government programs and aligning domestic and global clients. We currently handle IP for several government agencies (e.g., the Department of Energy and NASA) and have direct experience with government institutions (e.g., Sandia National Laboratory and the National Institute of Standards and Technology) expected to play significant roles in CHIPS programs.
Summary of Important Dates
The CPO will accept applications on a rolling basis following each of the stated opening dates listed below; the following dates are the earliest acceptance dates and are not final deadlines:
- Statement of Interest – Opened February 28, 2023
- Pre-application (leading-edge manufacturers only) – March 31, 2023
- Full application (leading-edge manufacturers only) – March 31, 2023
- Pre-application (current generation, mature node, and back-end manufacturers) – May 1, 2023
- Full application (current generation, mature node, and back-end manufacturers) – June 26, 2023
Contact Calfee today to learn how we can help companies navigate the CPO pre-application and application processes.
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