On September 29, 2023, the National Institute of Standards and Technology’s (NIST’s) CHIPS Program Office released a new funding opportunity announcement (FOA) for the construction, expansion, or modernization of facilities for the manufacture and production of semiconductor materials and manufacturing equipment for which the capital investment cost is less than $300 million. Up to $500 million in CHIPS incentives will be awarded under this latest FOA.

The latest FOA calls for proposals for construction, expansion, or modernization of the following types of facilities:

Semiconductor Materials Facilities: Facilities for the manufacture or production, including growth or extraction, of materials used to manufacture semiconductors, which are the chemicals, gases, raw and intermediate materials, and other consumables used in semiconductor manufacturing. Specific examples include but are not limited to polysilicon; photoresists and ancillaries (developers, strippers, litho solvents, and anti-reflective and hardmask layers); sputtering targets (including tantalum, titanium, and aluminum); and materials specifically used in quantum information systems (such as hafnium and niobium).

Semiconductor Manufacturing Equipment Facilities: Facilities for the physical production of specialized equipment integral to the manufacturing of semiconductors and subsystems that enable or are incorporated into the manufacturing equipment. Specific examples of semiconductor manufacturing equipment include but are not limited to deposition equipment, including chemical vapor deposition, physical vapor deposition, and atomic layer deposition; etching equipment (wet etch, dry etch); lithography equipment (steppers, scanners, extreme ultraviolet); wafer slicing equipment, wafer dicing equipment, and wire bonders; inspection and measuring equipment, including scanning electron microscopes, atomic force microscopes, optical inspection systems, and wafer probes; certain metrology and inspection systems; and ion implantation and diffusion/oxidation furnaces.

This most recent FOA uses an application process designed to be accessible for smaller businesses and projects, and consists of two phases:

• Phase 1 - Concept Plan: Applicants first submit a concept plan that describes how their proposed project addresses the core strategic objectives of the CHIPS Act, including U.S. economic and national security. Concept plans will be accepted between December 1, 2023, and February 1, 2024. 
• Phase 2 - Full Application: The most promising applicants will be invited to submit a full application for CHIPS incentives. The application submission dates will be provided to applicants individually upon notification of advancement. 

Those interested in obtaining funds should carefully review the full amended FOA and related documentation at https://www.nist.gov/chips/notice-funding-opportunity-small-scale-supplier-projects. Of note, the FOA specifies that applications for projects with capital investments of less than $20 million are unlikely to receive funding.

The CHIPS Program Office still anticipates announcing one additional funding opportunity later this year for research and development facilities. For information on prior CHIPS Act funding opportunities, please see our prior client alerts here (for semiconductor fabrication facilities) and here (for commercial facilities for wafer manufacturing semiconductor materials and manufacturing equipment for which the capital investment equals or exceeds $300 million).

Parties who seek to apply for funding under this FOA should ensure they understand and can meet the requirements of the FOA. Interested parties should continue to monitor https://nist.gov/chips for more information on this, as well as previously released and future FOAs. If you have questions concerning this FOA or other CHIPS Act issues, please contact Joshua Gruenspecht, Barath Chari, Seth Cowell, or other members of the firm's national security or technology transactions practices.