Red Tape Keeps CHIPS Acts Incentives Out Of Reach For Companies That Need It Most

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Kirk Ogunrinde is an editiorial intern covering emerging tech and innovation at Forbes. Previously, he worked at The Dallas Morning News as a data journalist and was the Sports Editor of Southern Methodist University’s newspaper, The Daily Campus. Send him tips at kogunrinde@forbes.com and give him Twitter follow @ogunrindekirk.

The application process is long and arduous for smaller semiconductor companies who often lack the resources to seek the very initiatives aimed at strengthening their domestic manufacturing.hen the CHIPS Act passed in 2022, Jessica Gomez, CEO of Rogue Valley Microdevices was excited, imagining the newly passed law might help expand her growing semiconductor manufacturing business.

August marks the anniversary of the CHIPS Act, which was passed by Congress in 2022 and spearheaded by the Biden administration. Under the Act, the Department of Commerce enacted initiatives aimed at strengthening domestic semiconductor manufacturing, design and research in the United States.

For example, Texas-based Photodigm, a photonics semiconductor manufacturing company, applied for a CHIPS award after its executives were encouraged to do so by their local congressman. After submitting their application, which cost them over $200,000, they struggled to woo investors for funding for the $50 million project they were planning to undertake. They ultimately were able to secure about $12.

For smaller manufacturers that don’t routinely produce policy agendas and sustainability reports for regulatory and compliance reasons this can be a real drag — and costly. Those looking to avail themselves of CHIPS funding often find themselves in need of additional help from consultants, lawyers, accountants and lobbyists, which piles on additional expenses.

 

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