[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]
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