The CHIPS Act of 2022
Section-by-Section Summary
CHIPS for America Appropriations: Summary ............................................................................................ 1
Sec.1. Short Title; Table of Contents........................................................................................................ 3
Sec.2. Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Fund .................. 3
Sec.3. Semiconductor Incentives .............................................................................................................. 4
Sec.4. Opportunity and Inclusion ............................................................................................................. 4
Sec.5. Additional GAO Reporting ............................................................................................................ 4
Sec.6. Appropriations for Wireless Supply Chain Innovation.................................................................. 4
Sec.7. Advanced Manufacturing Investment Credit ................................................................................. 5CHIPS for America Appropriations: Summary
Background: In December 2020, as part of the William M. (Mac) Thornberry National Defense
Authorization Act for Fiscal Year 2021, Congress passed into law funding programs from the bipartisan
CHIPS for America Act, authorizing Department of Commerce (DOC), Department of Defense (DoD),and Department of State (DOS) activities to develop onshore domestic manufacturing of semiconductors
critical to U.S. competitiveness and national security. Only 12% of chips are currently manufactured
domestically, compared to 37% in the 1990s, and many foreign competitors, including China, areinvesting heavily to dominate the industry. The United States also lacks capabilities to produce the mostadvanced chips at volume. The CHIPS Act of 2022 would provide appropriations needed to implement
the currently authorized programs from the bipartisan CHIPS for America Act. To ensure theCongressional goal of promoting domestic competitiveness, the Act also includes safeguards to ensurethat recipients of Federal funds from these programs cannot build advanced semiconductor production
facilities in countries that present a national security concern.
The CHIPS Act of 2022 also provides appropriations needed to implement the USA Telecom Act thatwas enacted in the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year
2021. This program helps shore up the global telecommunications supply chain and limit the scope ofinvolvement globally of telecommunication companies with close ties to the Communist Part of China,
like Huawei. Funds will be used to capitalize on U.S. software advantages, accelerating development ofan open-architecture model (known as OpenRAN) that would allow for alternative vendors to enter themarket for specific network components, rather than having to compete with Huawei end-to-end.
$54.2 Billion in Total Appropriations for CHIPS and Public Wireless Supply Chain Innovation(also known as ORAN):•CHIPS for America Fund:o DOC Manufacturing Incentives: $39 billion in financial assistance to build, expand, ormodernize domestic facilities and equipment for semiconductor fabrication, assembly,testing, advanced packaging, or research and development, including $2 billion specifically
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for mature semiconductors. Within the incentive program, up to $6 billion may be used forthe cost of direct loans and loan guarantees.
oDOC Research and Development (“R&D”): $11 billion for DOC research anddevelopment.
▪ DOC National Semiconductor Technology Center (“NSTC”): A public-private
partnership to conduct advanced semiconductor manufacturing R&D andprototyping; invest in new technologies; and expand workforce training anddevelopment opportunities.
▪ DOC National Advanced Packaging Manufacturing Program: A Federal R&D
program to strengthen advanced assembly, test, and packaging (“ATP”) capabilities,
in coordination with the NSTC.
▪ DOC Manufacturing USA Semiconductor Institute: A partnership between
government, industry, and academia to research virtualization of semiconductor
machinery, development of ATP capabilities, and the development and deploymentof training.
▪ DOC Microelectronics Metrology R&D: A National Institute of Standards andTechnology (“NIST”) research program to advance measurement science, standards,
material characterization, instrumentation, testing, and manufacturing capabilities.

•CHIPS for America Workforce and Education Fund: $200 million to kick start development of
the domestic semiconductor workforce, which faces near-term labor shortages, by leveraging
activities of the National Science Foundation.

•CHIPS for America Defense Fund: $2 billion for the DoD to implement the Microelectronics
Commons, a national network for onshore, university-based prototyping, lab-to-fab transition ofsemiconductor technologies—including DoD-unique applications—and semiconductor workforce
training.

•CHIPS for America International Technology Security and Innovation Fund: $500 million tothe DoS, in coordination with the U.S. Agency for International Development, the Export-Import
Bank, and the U.S. International Development Finance Corporation, to support international
information and communications technology security and semiconductor supply chain activities,
including supporting the development and adoption of secure and trusted telecommunications
technologies, semiconductors, and other emerging technologies.

•Public Wireless Supply Chain Innovation Fund: $1.5 billion through DOC National
Telecommunications and Information Administration (“NTIA”), in coordination with NIST, theDepartment of Homeland Security, and the Director of National Intelligence, among others, to spur
movement towards open-architecture, software-based wireless technologies, funding innovative,‘leap-ahead’ technologies in the U.S. mobile broadband market.

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Sec.1. Short Title; Table of Contents
This Act may be cited as the “CHIPS Act of 2022”.
Sec.2. Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Fund
In order to support the rapid implementation of the semiconductor provisions included in the FY21NDAA, this division would provide $52.7 billion in emergency supplemental appropriations. Thelanguage would also re-affirm that the purchase of stocks and dividends are not an eligible use of CHIPS
funds as determined by the eligible use of funds already required under the FY21 NDAA.
Funded activities include:• $50.0 billion allocated over 5 years for a CHIPS for America Fund. Funding must be used toimplement the Commerce Department semiconductor incentive—to develop domestic
manufacturing capability—and R&D and workforce development programs authorized by theFY21 NDAA (Sec. 9902 & 9906). Each fiscal year, up to 2 percent of funds are made available
for salaries and expenses, administration, and oversight, of which $5 million is available eachyear for the inspector general.
Within the fund, the following appropriations are available:o Incentive Program: $39 billion allocated over 5 years to implement the programs
authorized in Sec. 9902, of which $2 billion is explicitly provided to solely focus onlegacy chip production to advance economic and national security interests, as thesechips are essential to the auto industry, the military, and other critical industries. Within
the incentive program, up to $6 billion may be used for the cost of direct loans and loanguarantees.
▪ $19 billion in FY22, including the $2 billion legacy chip production funding▪ $5 billion each year, FY23 through FY26
o Commerce R&D and workforce development programs: $11 billion appropriatedover 5 years to implement programs authorized in Sec. 9906, including the NationalSemiconductor Technology Center (NSTC), National Advanced Packaging
Manufacturing Program, and other R&D and workforce development programs
authorized in Sec. 9906.
▪ $5 billion in FY22
• $2 billion for NSTC
• $2.5 billion for advanced packaging• $500 million for other related R&D programs▪ For use across the NSTC, advanced packaging, and other related R&D programs,
the following would be provided:• $2 billion in FY23
• $1.3 billion in FY24
• $1.1 billion in FY25
• $1.6 billion in FY26•

$2 billion for a CHIPS for America Defense Fund: Funding would be appropriated for theMicroelectronics Commons, a national network for onshore, university-based prototyping, lab-tofab transition of semiconductor technologies—including DoD-unique applications—andsemiconductor workforce training.

•$500 million for a CHIPS for America International Technology Security and Innovation
Fund: Funding would be allocated over 5 years to the Department of State, in coordination withthe U.S. Agency for International Development, the Export-Import Bank, and the U.S.
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International Development Finance Corporation, for the purposes of coordinating with foreign
government partners to support international information and communications technology
security and semiconductor supply chain activities, including supporting the development andadoption of secure and trusted telecommunications technologies, semiconductors, and otheremerging technologies.
•$200 million for a Creating Helpful Incentives to Produce Semiconductors (CHIPS) for
America Workforce and Education Fund: $200 million is over five years for the National
Science Foundation to promote growth of the semiconductor workforce, which faces the need to
add 90,000 workers by 2025.

Sec.3. Semiconductor Incentives
This section would amend the William M. (Mac) Thornberry National Defense Authorization Act for
Fiscal Year 2021 (Public Law 116-283) to—(1) Clarify the eligibility of upstream suppliers, essential to building strong domestic semiconductor
manufacturing ecosystems, to receive CHIPS funding.
(2) Ensure, in the provision of incentives for semiconductor manufacturing, consideration of a broad
range of semiconductors and the relevance of the technology to supply chain vulnerabilities.
(3) Authorize $2 billion in additional financial incentives for manufacturing of mature technology
nodes, with priority for critical manufacturing industries, such as the automotive industry.
(4) Provide the Department of Commerce with other transaction authority, to enable efficient
execution of CHIPS awards.
(5) Require that construction projects funded under the CHIPS Act are subject to Section 602 of thePublic Works and Economic Development Act of 1965 (42 U.S.C. 3212).
Finally, this section would prohibit the recipients of Federal incentive funds from expanding or building
new manufacturing capacity for certain advanced semiconductors in specific countries that present anational security threat to the United States. To ensure that these restrictions remain current with thestatus of semiconductor technology and with U.S. export control regulation, the Secretary of Commercein coordination with the Secretary of Defense and the Director of National Intelligence, would be required
to regularly reconsider, with industry input, which technologies are subject to this prohibition.
Sec.4. Opportunity and Inclusion
This section would require the Department of Commerce to establish activities and assign personnel toensure that the recipients of CHIPS manufacturing incentives meet their commitments to increase theparticipation of economically disadvantaged individuals in the semiconductor workforce. Such personnel
would also serve as a resource to support the participation of minority-owned businesses, veteran-owned
businesses, and women-owned businesses, in CHIPS-funded projects.
Sec.5. Additional GAO Reporting
This section would expand the scope of the Government Accountability Office report already required
under the FY21 NDAA to include an evaluation of potential Government steps to avoid semiconductor
shortages; to describe efforts taken to hire individuals from disadvantaged populations into thesemiconductor workforce; and to detail how funded projects support the needs of critical infrastructureindustries.
Sec.6. Appropriations for Wireless Supply Chain Innovation
This section would appropriate $1.5 billion for the Public Wireless Supply Chain Innovation Fund, tospur movement towards open-architecture, software-based wireless technologies, funding innovative,
Page 4 of 5‘leap-ahead’ technologies in the U.S. mobile broadband market. The fund would be managed by theNational Telecommunications and Information Administration (NTIA), with input from the National
Institute of Standards and Technology, Department of Homeland Security, and the Intelligence Advanced
Research Projects Activity, among others.
Sec.7. Advanced Manufacturing Investment Credit
The provision creates a 25 percent investment tax credit for investments in semiconductor manufacturing
and includes incentives for the manufacturing of semiconductors, as well as for the manufacturing of thespecialized tooling equipment required in the semiconductor manufacturing process. Taxpayers may electto treat the credit as a payment against tax (“direct pay”).
The credit is provided for property which is placed in service after December 31, 2022, and for whichconstruction begins before January 1, 2027.

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