CHIPS Act May Receive Boost from Defense Bill

WASHINGTON, Dec. 9, 2024 – More money may be headed to America’s semiconductor industry, as lawmakers push for additional funding in the National Defense Authorization Act for fiscal 2025.

In the defense bill set to pass before the end of the year, Sen. Maria Cantwell, D-Wash., a key architect of the CHIPS and Science Act, secured up to $500 million in additional funding for the Tech Hubs program.

This initiative was designed to stimulate regional innovation by creating hubs of semiconductor manufacturing and research across the country. The tech hubs focus on industries ranging from autonomous systems, quantum computing, biotechnology, precision medicine, clean energy advancement, semiconductor manufacturing, and more.

According to a release, only 10% of the originally authorized $12.9 billion for the program has been appropriated, leaving 19 of the 31 designated hubs without sufficient funding.

Republicans’ stance on the CHIPS Act remains to be seen, with mixed signals coming from key party leaders. President-elect Donald Trump criticized the legislation during his campaign, threatening to abandon it entirely, while House Speaker Mike Johnson initially stated that Republicans 'probably will' attempt to repeal the Act. Johnson later walked back his comments, suggesting that the party might instead focus on 'streamlining' its provisions by cutting what he called 'costly regulations.'

As the Republican-controlled House prepares to take up the defense bill this week, the future of CHIPS Act provisions remains uncertain. 

The tech hubs program has already demonstrated potential to transform regional economies. The Commerce Department reported in August that the CHIPS Act had drawn $30 billion in private investment spanning 23 projects across 15 states. 

These projects include 16 new semiconductor manufacturing facilities and are expected to create over 115,000 manufacturing and construction jobs across the country. 

In addition to the funding for tech hubs, Sen. Cantwell secured $3 billion for the Federal Communications Commission’s "Rip-and-Replace" program, which targets the removal of Chinese-made telecommunications equipment deemed a national security threat.