N ational Institute of S tandar ds and Techno l o gy | U .S . Departm e n t of C ommerce 1

CHIPS: The Intersection with States

State Economic Development Executives Network (SEDE)

October 26, 2023
N ational Institute of S tandar ds and Techno l o gy | U .S . Departm e n t of C ommerce 2

Background: CHIPS and Science Act
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The CHIPS and 

Science Act 

of 2022 
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N ational Institute of S tandar ds and Techno l o gy | U .S . Departm e n t of C ommerce 4

CHIPS for America Programs

Components:

1. Attract large-scale 

investments in advanced

technologies such as 

leading-edge logic and 

memory

2. Incentivize expansion 

of manufacturing capacity 

for mature and other types 

of semiconductors

$39 billion

for manufacturing

• National Semiconductor 

Technology Center

• National Advanced Packaging 

Manufacturing Program

• Manufacturing USA institute(s)

• National Institute of Standards 

and Technology measurement 

science

$11 billion

for R&D

Workforce development

Together with 

CHIPS 

initiatives from 

other agencies, 

including DOD, 

State, NSF, 

and Treasury
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CHIPS for America Vision

Economic 

Security

This act enables us to build 

more resilient supply chains 

for important components.

National 

Security

This act enables us to bring the 

most sophisticated technologies 

back to the U.S.

Future 

Innovation

Chips are key to the technologies and 

industries of the future, so we need to 

be at the forefront. This act will ensure 

long-term U.S. leadership in the sector.
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Manufacturing the Future

Under the Biden-Harris Administration, private companies have announced $500 billion in 

manufacturing, and over $231 billion in semiconductor manufacturing. 

Source: invest.gov; last updated September 26, 2023
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CHIPS Cluster Vision 

and the Role of States
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Regional clusters as the foundation for a competitive 

industry

By end of decade, United States will have at least two new large-scale clusters of leading-edge logic fabs. 

Each leading-edge cluster will have the scale, infrastructure, and other competitive advantages required 

to ensure that chipmakers view continued expansion in the United States as economically attractive and 

core to their business models, even in the absence of future funding from the CHIPS Program.

Cluster

A geographically compact area with...

Multiple commercial scale 

fabs owned and operated 

by one or more companies

A large, diverse, and 

skilled workforce Nearby suppliers to the 

semiconductor industry

Utilities

Specialized infrastructure, 

such as chemical processing 

and water treatment facilities

R&D facilities
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N ational Institute of S tandar ds and Techno l o gy | U .S . Departm e n t of C ommerce 9

CHIPS vision for success calls for vibrant regional 

clusters

By the 

end of the 

decade...

Strengthen Supply Chain Resilience

✓ The U.S. and its allies will reduce chokepoint 

risks flowing from geographic concentration

✓ Supply chain participants will improve the 

transparency of demand and supply to reduce 

the risks of production disruptions

✓ The U.S. will have incentivized major U.S. 

equipment and materials suppliers to increase 

their footprints in the U.S.

✓ Non-U.S. suppliers of the world's most advanced 

equipment, materials, and subsystems will also 

establish large-scale footprints in the U.S.

Advance U.S. Technology Leadership

Support Vibrant U.S. Fab Clusters

✓ Each CHIPS-funded fab cluster in the U.S. will be supported by dozens

of suppliers, including many investing in the U.S. for the first time

✓ State and local entities encouraged to help facilitate the expansion of

these ecosystems
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States can convene and support cluster 

ecosystems

Cluster 

governance 

and 

communication

Local coordination is critical

Local 

resource 

mobilization 

Regional

planning

Convene across broad cluster topics including 

permitting, infrastructure, housing, transit, 

research, startups, sustainability, workforce, 

childcare

Local cluster partners could include:

Supplier 

Facility

State/ 

Local 

Gov

Semiconductor 

Fab

Workforce 

Training 

Provider

Labor 

Union

Econ Dev 

Corp

Higher 

Ed 

Institution
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How can states support the CHIPS for 

America vision?

Incentives Workforce 

Development

Ecosystem R&D and 

Innovation

Attracting or facilitating 

expansion of manufacturing 

facilities, including materials 

and equipment 

Investing in workforce 

development at all levels of 

the semiconductor industry 

Investing in R&D and 

innovation to aid in 

developing the future 

technology of the industry 

Supporting infrastructure, 

permitting, monitoring needs
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Covered Incentives
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CHIPS Incentives Funding Instruments

Direct funding

$38.2B

Loans Loan 

guarantees

up to 

$75B

Alternate funding sources: 

- Private Investments 

- Investment Tax Credit (26 

U.S.C. § 48D)

- State & Local Incentives
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• An eligible entity must have been offered a 

covered incentive from a state or local 

jurisdiction where the project is located, for the 

purposes of construction, expansion, or 

modernization of the facility.

• Examples of this can be:

✓ Concessions related to real property

✓ Workforce pipeline and technical training investments 

✓ Funding for research and development with respect to 

semiconductors

✓ Investments in industrial infrastructure that 

specifically support the proposed project, but that also 

could support broader development of a supplier 

ecosystem such as shared utility, logistics, and 

production capacity

The CHIPS for America 

statute requires that 

applicants demonstrate 

they have secured 

incentives from state or 

local government
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States and municipalities could show this 

commitment in various ways

• Financial investments: Support industrial infrastructure that may aid a specific 

project but could support broader development of a supplier ecosystem such as 

shared utility, logistics, and production capacity

• Permitting: Expedited processes for environmental, health, and safety reviews 

and permits.

• Liaisons: Point of contact to assist with site selection, supplier discovery, and 

compliance with local laws.

• Workforce Training: Fund programs to ensure broad talent pipelines. 

• Integration: A systems integrator that works with ecosystem companies to 

address shared issues like navigating permits, building infrastructure, finding 

workers, and coordinating incentive applications.

• Cooperation: Planning and support for other ancillary investments such as 

housing and community development.

• Collaboration: Where relevant, partnership with other states and localities to 

develop regional ecosystems and corridors that encompass multiple jurisdictions.

Factors for States to consider:

• Financial incentive packages are 

encouraged to create the 

potential for large spillover 

benefits

• Incentives or actions that can 

help projects move quickly

• Find ways to boost regional and 

local economy gains and 

semiconductor ecosystem rather 

than just a single company

• Incentives or actions that reduce 

project risk

• Incentives or actions that 

promote regional cooperation—

e.g., through expedited 

processes, single-window 

liaisons, and project integration
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Since August 2022, states have passed their own "CHIPS" legislation, 

bolstering state incentives to help attract semiconductor investments 

and support an ecosystem.

Permitting and Site 

Selection

Tax Incentives

Incentives to 

Ecosystem Partners

R&D Funding

Workforce-related 

Incentives

Industrial Land Planning 

and Infrastructure 

Investments
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Other State Opportunities
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States will be critical partners in meeting the CHIPS 

for America semiconductor workforce vision

Over the next decade...

Double the U.S. semiconductor workforce overall.

Triple the number of graduates in semiconductor-related fields, including engineering.

Train 100,000 new technicians through apprenticeships, career and technical education, and career 

pathway programs. 

Expand recruitment for more people from underserved communities – including women and veterans 

– to launch semiconductor industry careers.

Hire and train an additional million women in construction to meet the demand across a range of 

industries, including CHIPS projects.
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Since the passage of the CHIPS and Science Act, at least 

seven states have announced new funding to support 

semiconductor workforce development, including:

Community college 

expansion

Tuition assistance

Instruction & equipment

Registered Apprenticeships

Curriculum development

Matching funds 

Workforce development to support a facility is an eligible use of funds for manufacturing incentives 

funds. In addition, workforce development has been named as one of the top three priorities for the 

National Semiconductor Technology. Over fifty community colleges in over 19 states have 

announced new or expanded programming to support semiconductor opportunities.
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New state investments in infrastructure development 

are also facilitating cluster development, including:

Grid resilience and energy 

sustainability, including 

renewables

Housing and zoning

Roads, transportation, and 

transit

Water and wastewater

Site development / site 

preparation funds

Fab projects bring significant industrial infrastructure needs (such as upgraded power grids, 

gas lines, and water treatment facilities) and other local infrastructure needs, such as housing 

and community amenities. State investments in these areas can contribute to building U.S. 

strength and competitive advantage in the industry.
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States can contribute to strengthening 

domestic supply chain resilience

Address key 

vulnerabilities

• States can attract 

continued investment 

to fill critical gaps in 

the ecosystem, 

including advanced 

materials and 

manufacturing 

equipment

Acclimate foreign 

firms new to 

business in the U.S.

• States can facilitate 

access to services, 

shared facilities and 

infrastructure, and 

guide critical suppliers 

through complexities 

of permitting or finding 

new customers

Create inclusive 

business 

opportunities

• States can work with 

partners to identify 

and engage with 

small, minority-owned, 

veteran-owned, and 

women-owned 

businesses and help 

these firms leverage 

the opportunity 

created by CHIPS
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Some states are supporting the semiconductor 

innovation ecosystem

Investments in research and development

Start-up incubators and accelerators that can advance next-generation 

technologies

Innovation centers, cleanrooms, and other facilities

States can enable continuous interplay among universities, R&D facilities, startups, 

and manufacturing upgrades.
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Program Update

and Next Steps
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Funding Opportunities

For commercial 

leading-edge, current, 

and mature node 

fabrication facilities

February 28, 2023 June 23, 2023

For large 

semiconductor 

materials and 

equipment facility 

projects $300M+

For smaller 

semiconductor 

materials and 

equipment facility 

projects under $300M

September 29, 2023

To support the 

construction of 

semiconductor R&D 

facilities

The CHIPS Program Office has received over 530 statements of interest

and more than 130 pre-applications and full applications
N ational Institute of S tandar ds and Techno l o gy | U .S . Departm e n t of C ommerce 25

CHIPS Small Supplier Opportunity 

Strongly Encourages Consortia

❑ At least 2 suppliers

❑ A state or local government 

entity

❑ An anchor institution

❑ May also contain 

workforce training 

providers, labor unions, 

econ dev corps, higher ed, 

and more

❑ Does not require an 

umbrella organization or 

formal legal structure 

What does a strong 

consortium look like?

Benefits

✓ We generally expect applicants 

applying as part of consortia to be 

better positioned to meaningfully 

contribute to the development or 

sustainability of a cluster.

✓ Applicants can work together to 

satisfy certain requirements

✓ Achieve greater economies of 

scale, efficiency, and 

effectiveness

✓ Take advantage of the shared skills 

and resources

Example: 

Science Park

• Land

• Shared Utilities and 

Infrastructure

• Streamlined Permitting

• Incentives for Suppliers
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CHIPS for America R&D

National 

Semiconductor 

Technology Center

National Advanced 

Packaging 

Manufacturing 

Program

Manufacturing 

USA institutes Metrology

WORKFORCE
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Next Steps

• Visit CHIPS.gov for resources, including:

• Notice of Funding Opportunity

• Vision for Success papers and Implementation Strategies

• Applicant guides and templates

• FAQs and fact sheets

• Webinar schedule (and slides/recordings of prior webinars)

• Teaming Partner List 

• Join our mailing list 

• Contact us

• askchips@chips.gov – general inquiries

• apply@chips.gov – application-related inquiries