How the CHIPS Act is Transforming the Semiconductor Industry

Why Prevailing Wages Matter to the Semiconductor Industry

Prevailing wage rates help create an equitable playing field for contractors bidding on government projects. They prevent companies from undercutting labor costs to win contracts using taxpayer dollars. 

The Department of Labor sets prevailing wage schedules based on comprehensive surveys of local pay for various construction trades and job types. Rates differ across geographic areas reflecting regional economic conditions. 

For payroll compliance in the Semiconductor Industry, key factors include: 

  • Construction trades: Prevailing wages for electricians, pipefitters, crane operators, and other building trades involved in plant construction.
  • Job classifications: Wage rates set for many semiconductor manufacturing roles like process technicians, cleanroom workers, and equipment maintenance personnel.
  • Certified payroll reports: Detailing employee work classifications, pay rates, and weekly hours to prove compliance. 

Industries of Focus

The Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act has ushered in a new era for the semiconductor industry in the United States. This groundbreaking legislation offers substantial funding to support and revitalize various sectors, including: 

Semiconductor Manufacturing

Providing subsidies for constructing new fabrication plants and expanding domestic production capacity. 


Investments in electrification and autonomous vehicles, reliant on advanced semiconductors.


Research grants for specialized chips catering to national security needs.

Telecommunication & Technology

Funding to bolster 5G deployment and semiconductor-enabled technologies. 

Semiconductor Manufacturing: A Bright Future with CHIPS Act 

Under the CHIPS Act, semiconductor manufacturers find themselves at the forefront of a transformative wave. This new act provides critical financial incentives for the industry, offering subsidies for the establishment of new fabrication plants and the expansion of existing domestic production capacity. 

This means that semiconductor companies have unprecedented opportunities to modernize their facilities, increase production, and drive innovation. The CHIPS Act aims to strengthen the industry's competitiveness and enhance its capability to meet the growing demand for advanced semiconductors. It also means that there are certain prevailing wages CHIPS Act changes to be aware of.

Semiconductor Research
5G Telecommunications

Telecommunications and the CHIPS Act 

The CHIPS Act isn't limited to the semiconductor industry alone. Telecommunications, a sector heavily reliant on semiconductors, also stands to benefit significantly. The Act allocates funding to support the deployment of 5G technology and to fortify supply chains. This investment is pivotal in ensuring that the United States remains at the forefront of global telecommunications technology. 

The growth of 5G networks and technologies demands a robust supply of advanced semiconductors. By supporting this sector, the CHIPS Act not only strengthens telecommunications infrastructure but also boosts the semiconductor industry's role in powering the digital future

Unlocking Government Contracts: The CHIPS Act Impact 

The Department of Commerce, in response to the CHIPS Act, launched several funding opportunities. According to a White House fact sheet:    

  • "The Department of Commerce launched the firstfunding opportunity for the $39 billion in semiconductor manufacturing incentives provided in the Act just six months after CHIPS was passed. This funding opportunity covers funding for projects to construct, expand, or modernize facilities producing semiconductors and for projects that are making large investments in facilities to produce semiconductor materials and manufacturing equipment. As the Department assesses applications, economic and national security considerations will be key factors and the program will, among other objectives, aim to provide a supply of secure, national-security relevant semiconductors.  

  • The Department of Commerce released a funding opportunity in May 2023 for Phase 1 of the $500 million Tech Hubs Program. This is an economic development program to develop centers of innovation across the country through support of regional manufacturing, commercialization, and deployment of key technologies.  

  • The National Science Foundation established a new Directorate for Technology, Innovation, and Partnerships. This Directorate has already launched the NSF Regional Innovation Engines program, which is helping to support innovation in geographies that have not received the full benefits of technology advancement in past decades. In May 2023, NSF announced 44 NSF Engines Development Awards spanning 46 U.S. states and territories, each funded at up to $1 million over two years to plan for a future NSF Engine. In August 2023, NSF announced 16 finalists for the inaugural set of NSF Engines awards, which are anticipated by the end of the year and will provide each NSF Engine with up to $160 million over up to 10 years.  

  • … the Department of Commerce announced its first round of grants from its $1.5 billion Public Wireless Supply Chain Innovation Fund to support the development of open and interoperable wireless networks." 

These developments signal a significant shift in the landscape of government contracts. You can explore the complete fact sheet for a comprehensive understanding of the changes set in motion. 

Funding Opportunities Abound with CHIPS Act 

The CHIPS Act has swiftly translated into tangible opportunities for businesses across various sectors. The Department of Commerce, in alignment with the Act's objectives, has introduced multiple funding opportunities that cater to the diverse needs of the industries involved. 

For instance, the semiconductor industry benefits from funding aimed at constructing and modernizing semiconductor production facilities. This is a game-changer, allowing manufacturers to not only meet the demands of the market but also enhance their technological capabilities. 

Moreover, the Tech Hubs Program, with its focus on regional innovation, offers businesses the chance to be part of cutting-edge developments. By supporting manufacturing, commercialization, and technology deployment, this initiative creates a conducive environment for growth and progress. 

The CHIPS Act is not just about allocating funds; it's about empowering businesses and industries to thrive in an era of technological revolution. 

Semiconductor Wage Compliance

Maintaining Prevailing Wage Compliance for the CHIPS Act

Ongoing due diligence allows companies to avoid fines, debarment, and other penalties for non-compliance. It also prepares manufacturers to efficiently capitalize on future government incentives. To leverage CHIPS Act funding, companies must institute robust prevailing wage CHIPS Act management programs covering: 

Compare current pay rates to prevailing wage schedules and make adjustments as needed. 

Meticulously document hours and earnings by job classification.

Continuously review federal and local prevailing wage determinations for changes.

Streamline certified payroll submission with integrated software.

Notify employees of prevailing wage protections per Davis-Bacon requirements.

Partnering for Success: Certified Payroll Software

Maintaining prevailing wage and payroll compliance in the Semiconductor Industry across large, complex projects like fab construction can prove extremely challenging without the right tools. 

Points North offers our automated Certified Payroll Reporting solution purpose-built for government contractors. Our software integrates with leading payroll platforms to simplify compliance processes including: 

  • Creating federal, municipal, state, and even union certified payroll reports 
  • Managing your rate management even in complex situations 
  • Customization options for custom report templates to meet any needs 
  • Scheduled Davis-Bacon report generation
  • Optimized distribution through email distribution lists and bulk email options
  • Integration with all major payroll solutions 

Centralized capabilities reduce administrative burdens so semiconductor manufacturers can focus on what really matters – their business. Customized compliance features for the industry also ensure alignment with CHIPS Act requirements even if requirements change. 

Let Us Help You Capitalize on the CHIPS Act

The CHIPS and Science Act provides enormous opportunities for US semiconductor companies to grow manufacturing capabilities. However, effectively leveraging federal incentives requires a clear prevailing wage compliance strategy adapted to this legislation. 

Partner with Certified Payroll Reporting by Points north to implement robust payroll processes, leverage integrate software, and uphold wage standards across your projects. Contact us today to start taking advantage of CHIPS Act jobs today!