Feds Outline Workforce Rules for $39B in Chip Plant Funding

Abstract

Semiconductor chip producers must pay their construction workforce prevailing wages and will be "Strongly encouraged" to use project labor agreements if they want a piece of the $39 billion available in federal funding to support their fabrication plant construction, expansion or modernization projects, U.S. Commerce Secretary Gina Raimondo says. CHIPS Program Office released its first notice of funding opportunity Feb. 28 for projects that will boost domestic production of advanced chips used in a wide variety of consumer and military applications. A department official who briefed reporters on the program says direct funding awards are set to range between 5-15% of project capital expenditures. Officials plan to first focus on larger projects that would have greater consequences for economic and national security, then smaller plants. A Commerce official says it believes project labor agreements would be effective, because of the scale and complexity of the fab projects, in keeping work on schedule and avoiding work stoppages. Any applicant who does not commit to using labor agreements will need to submit a construction workforce continuity plan to demonstrate exactly how projects would be ensured to stay on schedule. "We right now lack affordable child care, which is the single most significant factor keeping people, especially women, out of the labor force. We need to see how these companies are going to be meeting their labor force needs."Some projects that will likely seek federal funding through the program are already under construction.