[Federal Register Volume 87, Number 196 (Wednesday, October 12, 2022)]
[Notices]
[Pages 61570-61573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22158]


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DEPARTMENT OF COMMERCE

National Institute of Standards and Technology

[Docket Number 21006-0213]


Implementation of the CHIPS Incentives Program

AGENCY: National Institute of Standards and Technology (NIST), 
Commerce.

ACTION: Notice; request for information.

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SUMMARY: The CHIPS Program Office (CPO) within the National Institute 
of Standards and Technology (NIST) is seeking further information in 
order to inform the design and implementation of the CHIPS incentive 
programs, based on amendments to the CHIPS program resulting from the 
CHIPS Act of 2022. This Request for Information (RFI) follows the 
``Incentives, Infrastructure, and Research and Development Needs to 
Support a Strong Domestic Semiconductor Industry'' RFI issued by the 
U.S. Department of Commerce (the Department) on January 24, 2022, prior 
to enactment of the CHIPS Act of 2022. On September 6, 2022, the 
Department released ``A Strategy for the CHIPS for America Fund,'' 
describing the Department's implementation strategy for the funds 
Congress appropriated to catalyze long-term growth in the domestic 
semiconductor industry. This strategy was informed in part by the 
information received in response to the January 2022 RFI. Responses to 
this RFI, considered alongside responses to the prior RFI, will further 
inform the planning of the CPO for the implementation of these 
programs.

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DATES: Comments must be received by 5:00 p.m. Eastern time on November 
14, 2022. Written comments in response to this RFI should be submitted 
in accordance with the instructions in the ADDRESSES and SUPPLEMENTARY 
INFORMATION sections below.

ADDRESSES: To respond to this RFI, please submit electronic public 
comments via the Federal e-Rulemaking Portal.
    1. Go to www.regulations.gov and enter DOC-2022-0001 in the search 
field,
    2. Click the ``Comment Now!'' icon, complete the required fields, 
and
    3. Enter or attach your comments.
    Comments sent by any other method, to any other address or 
individual, or received after the end of the comment period, may not be 
considered.
    Information submitted in response to this request may contain 
business proprietary information, which will not be published and will 
be protected from disclosure, provided the submitters follow the 
instructions in SUPPLEMENTARY INFORMATION for submitting confidential 
business information.
    Comments containing references, studies, research, and other 
empirical data that are not widely published should include electronic 
copies of the referenced materials.
    For Public Meetings/Webcast:
    The CPO may hold future workshops to explore in more detail 
questions raised in the RFI. Notice and details about any potential 
future workshop dates, registration deadlines, and other related 
information will be announced at www.chips.gov.

FOR FURTHER INFORMATION CONTACT: For questions about this Notice, 
please contact Sam Marullo at 202-482-3844 or email [email protected]. 
Please direct media inquiries to the CHIPS Press Team at 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    The CPO is currently working to implement programs authorized by 
Title XCIX of the William M. (Mac) Thornberry National Defense 
Authorization Act for Fiscal Year 2021, 15 U.S.C. 4651 et seq., as 
amended by sections 103 and 105 of the CHIPS Act of 2022, with the goal 
of releasing an initial funding document for the semiconductor 
incentives program within six months of the passage of the CHIPS Act of 
2022.
    The Department of Commerce published an RFI in January 2022 seeking 
to inform the planning of the CHIPS Programs.\1\ However, the CHIPS Act 
of 2022 subsequently amended the authorizing legislation for these 
programs in several areas, including:
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    \1\ Incentives, Infrastructure, and Research and Development 
Needs to Support a Strong Domestic Semiconductor Industry, 87 FR 
3497 (January 24, 2022), https://www.federalregister.gov/d/2022-01305.
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     Permitting incentives in the form of loans, loan 
guarantees, or other transactions,
     Expanding eligibility for CHIPS incentives to include 
facilities and equipment for the fabrication, assembly, testing, 
production, or research and development of materials used to 
manufacture semiconductors and semiconductor manufacturing equipment,
     Requiring applicants to provide plans to identify and 
mitigate relevant semiconductor supply chain security risks and 
policies and procedures to combat cloning, counterfeiting, and 
relabeling,
     Establishing an expansion clawback that prohibits CHIPS 
incentive recipients from investing in certain projects in countries of 
concern,
     Creating taxpayer protections to prevent recipients from 
spending CHIPS funds on stock buybacks or dividends, and
     Directing analyses of certain diversity, equity, and 
inclusion elements of the CHIPS programs.
    The CPO is issuing this RFI to inform its consideration and 
implementation of these amended sections.

Specific Requests for Information

    The following statements and questions cover the major topic areas 
about which the CPO seeks comment. They are not intended to limit the 
topics that may be addressed. Responses may include any topic believed 
to inform U.S. Government efforts in developing recommendations for 
supporting the growth and sustainment of a robust domestic 
semiconductor manufacturing sector to meet the current and future needs 
of the public and private sectors, regardless of whether the topic is 
included in this document.
    Respondents are encouraged to respond to any or all of the 
following questions and topic areas, and may address related topics. 
Your comments should indicate which questions or topics you are 
addressing. Responses may include estimates, which should be designated 
as such. Your responses may include supporting data and examples. If 
your response relies on publications or studies, please attach them. 
Respondents may organize their submissions in response to this RFI in 
any manner.
    The CPO is requesting information related to the following topics:

Use of Grants, Loans, and Loan Guarantees

    1. The Department may allocate up to $6 billion out of the $39 
billion of total incentives to support loans and loan guarantees to 
covered entities. This $6 billion has a significant multiplier effect: 
the principal amount of financing available through loans and loan 
guarantees could be leveraged to support up to $75 billion in loans and 
loan guarantees. This leverage will help the CPO achieve the needed 
scale of investment by facilitating additional private capital and 
providing access to debt for companies with reasonable prospects for 
repayment. Applicants will be encouraged to consider loans or loan 
guarantees as part of their federal assistance application package. 
Which types of companies in the supply chain would benefit most from 
the use of the loans or loan guarantees to supplement or in lieu of 
CHIPS grants?
    2. How should CHIPS financial assistance (grants, loans and/or loan 
guarantees) be designed to be additive to, rather than a substitute 
for, private sector equity or debt capital?
    3. What information is available on how foreign and domestic 
companies engaged in semiconductor manufacturing or suppliers to that 
industry evaluate whether to invest in a discrete project--for example, 
through internal rates of return (IRR)? Do evaluations and IRRs differ 
by producer, project, technology, or segment of industry?
    4. What debt/equity ratios have semiconductor manufacturers or 
suppliers used in previous projects that are individually financed?
    5. Does the industry, including foreign and domestic firms, finance 
semiconductor manufacturing or supplier investments on a limited 
recourse or nonrecourse project finance basis? What proportion of 
investments are financed this way?
    6. How does access to debt and capital markets differ for companies 
across the semiconductor sector? Which parts of the sector struggle to 
access debt and equity capital?

Financial Assistance for Upstream Suppliers and Materials Used To 
Manufacture Semiconductors

    7. For purposes of this set of questions, the upstream supply chain 
refers to companies that provide materials (including minerals, 
chemicals, slurries, gases, photomasks,

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photoresists), equipment, or other inputs (including specialized 
services) for the semiconductor manufacturing process. Which elements 
of the upstream supply chain could constrain the ability to expand 
domestic semiconductor production? For example, if U.S. semiconductor 
production were to increase by 30%, would suppliers be able to keep 
pace? Please specify in terms of categories like industrial gases, raw 
materials, specialty chemicals, wafers, photoresists, and/or 
photomasks.
    8. The CHIPS Act of 2022 increased the eligibility for Section 9902 
incentives to include facilities and equipment for the fabrication, 
assembly, testing, production, or research and development of materials 
used to manufacture semiconductors. Which materials should be included 
in the definition of ``materials used to manufacture semiconductors'' 
and why? For each material identified, if a new facility were 
constructed for the production of that material, what typical 
percentage of that facility's equipment and output would be expected to 
be used for semiconductor production, as opposed to other manufacturing 
processes?
    9. Which materials used to produce semiconductors and semiconductor 
manufacturing equipment are currently produced within the U.S. and 
which are not? Are there technological or other limitations that 
currently inhibit production of such materials in the United States? 
Which materials and equipment, if any, have contributed to production 
delays or other inventory challenges? Which do you think are most 
likely to contribute to delays or challenges in the future?
    10. How are upstream suppliers concentrated geographically? Are any 
concentrated in a manner that could constrain the ability to expand 
semiconductor manufacturing?
    11. Which materials or equipment critical to semiconductor 
production are only or predominately available from a single source?
    12. How do upstream suppliers work with fabs on new facility 
proposals? What types of agreements or commitments do fabs offer 
upstream suppliers to co-locate with new construction?
    13. What have been the biggest supply chain bottlenecks for U.S. 
semiconductor fabs over the past five years?

Intellectual Property

    14. The CHIPS Act of 2022 requires that applicants submit 
``policies and procedures to combat cloning, counterfeiting, and 
relabeling of semiconductors.'' Are there standard policies and 
procedures that companies or industry groups use to achieve this goal? 
Which industry or publicly defined standards should be used to measure 
the effectiveness of efforts to combat cloning, counterfeiting, or 
relabeling?

Expansion Clawback

    15. The Secretary has authority, in consultation with the Secretary 
of Defense and the Director of National Intelligence, to define the 
terms ``semiconductor manufacturing'' and ``semiconductor manufacturing 
capacity.'' To ensure effective limits on manufacturing in foreign 
countries of concern--while balancing the interests of potential 
eligible CHIPS applicants that may have existing legacy facilities--
what types of activities would need to be included under the scope of 
these terms? How do industry members define the terms in trade usage?
    16. What considerations are relevant in determining what memory, 
analog, packaging, and other technologies should be considered 
equivalent to 28 nm logic chips?
    17. Given the complexities in chipmakers determining where their 
product might eventually reach its end-use, how can the CPO best 
enforce the requirement that a proposed investment ``predominately 
serve[s] the market'' of the foreign country?

Taxpayer Protections

    18. The CPO has committed to prioritizing companies that are 
dedicated to making investments in manufacturing, innovation, and 
workers. Are there types of investments and/or pre-commitments that 
data suggest have been most effective in promoting inclusive economic 
growth for workers and communities?
    19. The CPO intends to preference companies which commit not to 
engage in stock buybacks with non-CHIPS funds. What terms and length 
should the CPO seek in such a commitment and should the commitment 
extend to any forms of capital distribution beyond buybacks? What types 
of existing buyback programs or programs tailored to prevent dilution 
from the award of employee stock compensation exist within the 
industry?
    20. Should the CPO consider companies' existing capital allocation 
strategies in formulating the standards it will apply to its evaluation 
of stock buybacks and the payment of dividends, and if so, how?

Opportunity and Inclusion

    21. What are the primary barriers to entry for individuals from 
underserved communities seeking employment in the industry, including 
economically disadvantaged individuals, women, people of color, 
veterans, disabled individuals, people without college degrees, and 
people in rural communities? Do the barriers differ by job type? By 
community? By geography?
    22. What policies have been successful in ensuring that job 
opportunities are good quality and available to and filled by a diverse 
pool of workers? Does industry currently offer wrap-around services to 
employees: childcare, paid leave, transportation, etc.? Why or why not?
    23. What actions can industry take to promote diversity, equity, 
and inclusion in the projects that receive CHIPS incentives? What 
actions is industry already taking to promote diversity, equity, and 
inclusion? In responding, please consider inclusion broadly, such as 
women, people of color, veterans, disabled individuals, people without 
college degrees, and people in rural communities.
    24. What policies have proven effective in providing opportunities 
for small and underrepresented businesses including minority-owned, 
women-owned and veteran-owned businesses and rural businesses. Which 
tactics are most effective in creating opportunities in fab 
constriction? The production supply chain? R&D?
    25. What actions can the CPO take to ensure that the implementation 
of the CHIPS incentive programs is equitable and inclusive?

Other

    26. What other information should inform the CPO's implementation 
of the CHIPS incentive programs?
    27. What data will be important for the agency to collect to build 
evidence on the effectiveness of the CHIPS program? What are potential 
data sources?

Requirements for Written Comments

    Anyone submitting business confidential information should clearly 
identify the business confidential portion at the time of submission, 
file a statement justifying nondisclosure and referring to the specific 
legal authority claimed, and provide a non-confidential version of the 
submission. Users submitting a form that contains business confidential 
information will need to submit a non-confidential version of the same 
form that does not contain the confidential business information. The

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non-confidential version of the submission will be placed in the public 
file on https://www.regulations.gov. For comments submitted 
electronically containing business confidential information, the file 
name of the business confidential version should begin with the 
characters ``BC.'' Any page containing business confidential 
information must be clearly marked ``BUSINESS CONFIDENTIAL'' on the top 
of that page. The non-confidential version must be clearly marked 
``PUBLIC.'' The file name of the non-confidential version should begin 
with the character ``P.'' The ``BC'' and ``P'' should be followed by 
the name of the person or entity submitting the comments.
    All relevant non-confidential comments, including attachments and 
other supporting materials, received in response to the RFI will 
generally be made publicly available on www.regulations.gov.

Alicia Chambers,
NIST Executive Secretariat.
[FR Doc. 2022-22158 Filed 10-11-22; 8:45 am]
BILLING CODE 3510-13-P