The production area of ​​SK Siltron CSS, a silicon wafer factory being expanded by the South Korean semiconductor maker, is seen in Auburn, Michigan, U.S., March 16, 2022. REUTERS/Rebecca cooking

WASHINGTON, July 28 (Reuters) – The U.S. House of Representatives plans to pass sweeping legislation on Thursday aimed at boosting the U.S. semiconductor industry as it competes with China by granting about $52 billion in subsidies as well as an investment tax credit for chips. factories estimated at $24 billion.

Here are some highlights from the current version of the 1,054-page “CHIPS Act of 2022,” which also includes funding authorizations for the National Science Foundation and the Department of Energy’s Office of Science.

A first version of the bill was passed in the Senate more than a year ago, but stalled in the House of Representatives.

CREATING USEFUL INCENTIVES FOR SEMICONDUCTOR (CHIP) PRODUCTION FOR THE US FUND

This $52 billion fund – spread over five years – includes $39 billion in financial assistance to companies to build, expand or modernize national manufacturing, assembly, testing, advanced packaging and research and semiconductor development.

It includes $10 billion for Department of Commerce (DOC) research and development, including public-private partnerships and partnerships between government, industry and academic institutions, and $1 billion to create the “Competition pilot program”, to support communities in persistent difficulty with economic development. Activities

* Includes $1.5 billion for the Public Wireless Supply Chain Innovation Fund to boost open-architecture software-based wireless technologies to help replace telecommunications equipment from companies such as Huawei and ZTE

BODYGUARD

To ensure that the $50 billion is used to expand the manufacturing capacity of the United States, the legislation specifies that companies cannot use the money to buy stocks or pay dividends, but that does not prevent them to use other funds to do so.

The funding is to be used to implement the Department of Commerce’s Semiconductor Incentive – to expand domestic manufacturing capability as well as previously authorized research and development and workforce development programs .

TAX CREDITS

The legislation creates a 25% investment tax credit for semiconductor manufacturing and includes incentives to manufacture the chips themselves as well as the specialized equipment needed to manufacture the chips.

The credit is given for assets put into service after December 31, 2022, whose construction begins before January 1, 2027. This is estimated at $24 billion.

STIMULATE SCIENCE

The bill authorizes $200 billion over 10 years primarily for research activities. This includes a significant increase in approvals for programs to expand the work of the National Science Foundation and establish regional technology centers to foster high-tech development in areas of the country that have not been centers for technology. ‘industry. But separate legislation will be needed to fund these programs.

Democratic Sen. Chuck Schumer only included funding for science in the bill after winning support from Republicans in a first procedural vote last week. Read more

AND SOME EXTRAS

Bill includes provisions to expand ‘STEM’ – science, technology, engineering and math education, including measures to reach traditionally underserved communities, boost hiring of alumni fighters in STEM careers and tackling sexual harassment in science.

The bill includes $19.4 million in funding to provide enhanced security protection for U.S. Supreme Court justices and clerks, a response to threats against justices as the High Court issued a ruling. series of unprecedented decisions, including the cancellation of the right to abortion.

It also includes permission from NASA, the National Aeronautics and Space Administration.

Reporting by Patricia Zengerle and David Shepardson; Editing by Mark Porter

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