Daily Local News (West Chester, PA)

Computer chip funding has strings attached

- By Josh Boak

The Commerce Department is opening the applicatio­n process for computer chip manufactur­ers to access $39 billion in government support to build new factories and expand production.

All companies seeking the funds will need to show how they plan to develop a local workforce, with firms getting $150 million or more also required to provide affordable and accessible child care for their workers.

The funding is part of the CHIPS and Science Act, which President Joe Biden signed into law last August. Grants, loans and loan guarantees are meant to revive domestic production of computer chips.

It’s aimed at sharpening the U.S. edge in military technology and manufactur­ing while minimizing the kinds of supply disruption­s that occurred in 2021, after the start of the coronaviru­s pandemic, when a shortage of chips shut down factory assembly lines and fueled inflation.

“This is fundamenta­lly a national security initiative,” Commerce Secretary Gina Raimondo said as the applicatio­n process began Tuesday. “We are not writing blank checks to any company that asks.”

The money is meant to support private investment in new factories and can be clawed back if companies use it on stock buybacks instead. Major companies such as Intel, TSMC, IBM, Micron and Texas Instrument­s have already launched aggressive expansions tied to the support, which will total $52 billion when coupled with funding for research.

Raimondo said that any company that receives support cannot expand its manufactur­ing capacity in foreign countries that are a source of national security concerns, a restrictio­n that would appear to apply to China. Nor could recipients partner with firms based in those countries for the purposes of developing advanced technologi­es.

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