CHIPS for America Fact Sheet February 28, 2023

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Funding Opportunity – Commercial Fabrication Facilities 

FACT SHEET: 

Protecting U.S. Taxpayers 

CHIPS funding will promote U.S. leadership in chipmaking, strengthen the semiconductor supply chain, and 

advance U.S. economic and national security. Achieving these goals requires a robust commitment to protecting 

taxpayer resources. The CHIPS Program Office will implement a number of safeguards to ensure that companies 

that receive funding are holding up their end of the bargain.

First, the application process is designed to ensure that the CHIPS Program Office provides the minimum 

amount necessary to incentivize investment, allowing CHIPS funds to support as broad a range of projects as 

possible. These provisions include:

• Extensive due diligence. Before receiving an award, each applicant will be required to submit a detailed 

financial model for its proposed project(s). The CHIPS Program Office will analyze the model against 

market data, conditions, and benchmarks; the historical performance and returns of comparable 

projects; relevant expert analysis; and other information, in addition to conducting thorough diligence.

• Upside sharing. The CHIPS Program Office will require recipients of more than $150 million in direct 

funding to share with the U.S. government a portion of any cash flows or returns that exceed the 

applicant’s projections above an established threshold. This requirement will be waived only in 

exceptional circumstances. The terms of upside sharing will be set on a case-by-case basis and will 

incentivize companies to ensure that their financial projections are as accurate as possible. Any upside 

sharing proceeds will go to support the purposes of the CHIPS Act and strengthen the U.S. 

semiconductor ecosystem.

• Requiring companies to certify the accuracy of information provided to the government. Companies 

will be subject to enforcement actions pursuant to criminal statutes related to the submission of false 

information to the government, the False Claims Act, and other applicable legal authorities.

Second, applications will be evaluated based on the extent to which they protect taxpayer resources.

Applicants will be assessed based on their commitments to:

• Activate private capital. The CHIPS Program Office will give strong preference to projects that have 

activated significant private capital, as this will increase the scale of investment available and ensure 

that CHIPS incentives complement — rather than crowd out — private markets.

• Make investments in the U.S. semiconductor industry, with corresponding commitments regarding 

stock buybacks. The CHIPS Program Office will give preference to applications that credibly commit to 

investing in the domestic semiconductor industry, including by building domestic R&D fabs or other 

domestic R&D facilities. In addition, the CHIPS Program Office will require all applicants to detail their 

intentions with respect to stock buybacks over five years, including whether they intend to refrain from 

or limit them. The CHIPS Program Office will evaluate applications based on the extent of the applicant’s 
CHIPS for America Fact Sheet

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commitments to refrain from stock buybacks. Applicants are also prohibited by law from using CHIPS 

funds for dividends or stock buybacks.

• Give preference to state and local incentives packages that create positive spillover effects. Applicants

for CHIPS funds need to have been offered a state or local government incentive to be eligible for 

funding. But the CHIPS Program Office will not facilitate or participate in a race-to-the-bottom to divert 

vital state and local revenues to corporate bottom-lines. The CHIPS Program Office will give preference 

to projects that include state and local incentive packages capable of creating spillover benefits that 

improve regional economic resilience and support a robust semiconductor ecosystem beyond assisting a 

single company, such as incentives that include investments in workforce, education, site preparation, 

or infrastructure. The CHIPS Program Office will accord less weight to incentives, such as direct tax 

abatements, with less potential for spillover benefits. 

Finally, the CHIPS Program Office will strictly monitor companies to ensure that they are using taxpayer 

dollars wisely.

• Reporting requirements. The CHIPS Program Office will require regular reporting from award recipients 

so that it can closely monitor whether applicant commitments are being upheld and program objectives 

have been achieved. The CHIPS Program Office will track the performance of each award via financial 

and programmatic reports that will generally be required no less than semi-annually.

• Enforcing compliance with award terms. The CHIPS Program Office will make sure that companies are 

complying with the terms of their award, including, as applicable, any commitments the applicant made 

as part of the application process. Failure to adhere to these terms may result, where appropriate, in the 

temporary withholding or suspending of payments, the suspension or termination of the award, the

clawing back of funds made available under the award, the initiation of suspension or debarment 

proceedings in accordance with law, or other remedies to ensure the efficient and effective execution of 

the project.

• Holding companies to construction and operational milestones. CHIPS funding will be disbursed in 

tranches tied to project milestones in connection with capital expenditures, workforce development, 

and operational costs to ensure that companies make progress on their projects. In addition, if a project 

does not commence and complete by the target dates specified in an award, the CHIPS Program Office

can progressively recover up to the full amount of the award.