Integrated circuits on silicon semiconductors—commonly called semiconductor microchips or “chips”—are components in electronic devices that perform functions such as data processing and storage. These chips are essential inputs for many industries, including advanced technology and defense applications. Congress has passed legislation to bolster the semiconductor industry in the United States. Legislation included the Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS Act; P.L. 117-167, Division A), which appropriated $39 billion for an incentives program to support companies to build or expand commercial semiconductor fabrication facilities (fabs) that manufacture chips or inputs for chip production. The CHIPS Act aimed to increase chip manufacturing capacity in the United States, address supply chain vulnerabilities, and improve the competitiveness of the semiconductor and technology industries. In addition, some Members of Congress sought to improve national security by ensuring the domestic production of chips employed in weapons systems. The U.S. Department of Commerce (DOC) oversees the CHIPS Act incentives program, which offers financial assistance in the forms of direct funding, loans, and loan guarantees to eligible entities. By January 2025, DOC had funded 19 semiconductor companies with $30.7 billion in awards and $5.5 billion in loans for 40 commercial semiconductor fab projects. In addition, 12 companies signed preliminary agreements with the National Institute of Standards and Technology (NIST, part of DOC) for 18 projects, with final awards dependent on DOC’s satisfactory due diligence reviews of their project proposals. As of June 2026, public records do not indicate whether these 12 companies have received final awards. In March 2025, President Trump stated his intention to renegotiate award agreements with funding recipients. Subsequently, two awardees, Micron and Taiwan Semiconductor Manufacturing Corporation, separately announced plans to increase the total capital expenditure of their projects being funded with the federal award. The total award amount for Micron was revised to include an additional $275 million after its announcement. Another award recipient, Intel, provided the U.S. government with its equity in exchange for a direct funding award. As of July 2026, other award recipients have not publicly announced changes to their total capital expenditure or awards. Before DOC began announcing final awards in the second half of 2024, some companies had postponed the expected start or completion of their projects. Some companies cited uncertainties around federal funding as their reason for postponement; others attributed their delay to concerns about the lack of skilled workers who could build and equip commercial semiconductor fabs. Customer demand also appeared to shape some projects’ timelines. In addition, challenges relating to mitigation planning for the potential environmental effects of the construction and operation of the award-funded fabs may have contributed to schedule changes. Congress may look to evaluate implementation progress to date and weigh policy options regarding the incentives program’s future. FY2026 is the final year for which DOC is to receive CHIPS Act funding for incentivizing the domestic production of semiconductors. Further, the 35% investment tax credit for capital expenses associated with the production of semiconductors and equipment for manufacturing semiconductors is available only to projects that begin fab construction before December 31, 2026. Congress may consider whether to extend additional public resources for commercial fabs built or expanded under the incentives program beyond FY2026. Either in conjunction with or as an alternative to providing additional appropriations, Congress might consider whether and, if so, how it might address challenges that have emerged during the implementation of the CHIPS Act incentives program. Congress may require DOC to report more frequently on the status of award negotiations and due diligence reviews of applicants awaiting an award. Congress may choose to change the criteria for funding eligibility to accelerate the review process. Congress may ask DOC to study the efficacy of funded programs to develop the semiconductor industry workforce. Congress also may choose whether to prioritize legacy chips used in less advanced applications to address market demands.
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