Shulou(Shulou.com)11/24 Report--

The U.S. government announced Tuesday that it will require companies receiving subsidies from its $52 billion semiconductor bill to share excess profits and explain how they plan to provide affordable child care services.

The Commerce Department on Tuesday unveiled plans for applications for $39 billion of those manufacturing subsidies, which will begin accepting applications at the end of June. The plan also provides a 25 percent investment tax credit for chip factory construction, estimated to be worth $24 billion. The Chip Act plays a central role in the Biden administration's efforts to bring semiconductor manufacturing back to the United States.

Chip companies that receive more than $150 million in direct funding "will be required to share with the U.S. government a portion of any cash flows or returns that exceed the applicant's expected agreed threshold," the Commerce Department said. The Department of Commerce expects that "upward sharing will be substantial only if the project significantly exceeds its projected cash flow or return, and will not exceed 75 percent of the recipient's direct funding award."

At the same time, subsidized chip companies are prohibited from using the funds for dividends or share buybacks, and companies must provide details of any plans to buy back their own shares over the next five years. The Commerce Department will take into account "the applicant's commitment not to repurchase stock."

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