CHIPS and Science Act
Aug 9, 2022
Statute: 136 Stat. 1366
Became law: Aug 9, 2022
Aug 9, 2022
Statute: 136 Stat. 1366
Became law: Aug 9, 2022
Full breakdown available
This pages provides a high-level overview of this law. For full list of provisions, line-item appropriations, and specific funding allocations, please view our detailed breakdown.
Summary
Provides money to increase computer chip making in the U.S. and supports science research to help America compete with other countries.
What problem does this solve?
The U.S. relies too much on other countries for computer chips, which are vital for national security and everyday products. This law gives money and tax breaks to companies to build chip factories in the U.S. and funds science to create new technologies.
What does this law do?
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Creating helpful incentives to produce semiconductors (CHIPS) for America fund
Creates the CHIPS for America Fund
Establishes a fund with over $50 billion for the Department of Commerce to provide financial incentives for building, expanding, or modernizing semiconductor manufacturing facilities in the U.S.
Establishes an advanced manufacturing tax credit
Creates a 25% investment tax credit for qualified investments in facilities that manufacture semiconductors or semiconductor manufacturing equipment.
Restricts expansion in countries of concern
Requires companies receiving funds to agree not to significantly expand semiconductor manufacturing in China or other foreign countries of concern for 10 years, or they must pay the money back.
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Limitation on using amounts for stock buybacks or the payment of dividends
Prohibits use of funds for stock buybacks
Forbids companies receiving funds from using the money to purchase their own stock or pay dividends to shareholders.
Funds research and innovation
Authorizes tens of billions of dollars over five years for the National Science Foundation, Department of Energy Office of Science, and NIST to support research, education, and innovation.
Creates a new NSF directorate
Establishes the Directorate for Technology, Innovation, and Partnerships within the National Science Foundation to accelerate research and development in key technology areas.
Funds wireless supply chain innovation
Appropriates $1.5 billion for the Public Wireless Supply Chain Innovation Fund to promote the development of open and interoperable wireless network technologies.
Establishes regional technology hubs
Authorizes the Department of Commerce to designate at least 20 regional technology and innovation hubs across the country to support regional economic development and innovation.
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Requirements for foreign talent recruitment programs
Strengthens research security
Prohibits federal research personnel from participating in foreign talent recruitment programs and requires researchers to disclose participation in such programs.
Supports STEM education and workforce
Includes numerous provisions to broaden participation in STEM, especially for underrepresented groups, rural communities, and specific types of universities like HBCUs.
Who does this affect?
- Semiconductor companies
- Scientific researchers and universities
- STEM students and educators
What is the real world impact?
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Strengthens national security
Reduces reliance on foreign countries, especially China, for essential computer chips used in military and critical infrastructure, making the U.S. supply chain more secure.
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Boosts U.S. economic competitiveness
Provides billions in funding and tax credits to bring semiconductor manufacturing back to the U.S., aiming to create high-tech jobs and reclaim global leadership in the industry.
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Spurs scientific and technological innovation
Authorizes major funding increases for federal science agencies like the NSF and Department of Energy to accelerate research in key areas like AI, quantum computing, and clean energy.
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A handout to large corporations
Critics argue the law provides billions in taxpayer subsidies to highly profitable semiconductor companies without enough guarantees that the benefits will flow to workers or consumers, rather than shareholders.
When does this start?
This law outlines various funding schedules and deadlines for different programs, with many provisions taking effect in fiscal year 2022 and 2023.
Advanced manufacturing investment credit
The 25% tax credit applies to property placed in service after December 31, 2022.
Termination of manufacturing credit
The advanced manufacturing investment credit will not apply to property where construction begins after December 31, 2026.
CHIPS for America Fund appropriations
Provides $24 billion for fiscal year 2022, with additional billions appropriated each year through fiscal year 2026.
Legacy semiconductor definition updates
The Secretary of Commerce must issue updates to the definition of 'legacy semiconductor' not later than 2 years after the law's enactment, and every 2 years after that.