US Commerce chief urges chip companies to begin environmental reviews

4:37 pm Thursday, March 02nd, 2023

By David Shepardson

WASHINGTON (Reuters) – Commerce Secretary Gina Raimondo said on Thursday semiconductor chip companies seeking U.S. government funding should move quickly on environmental reviews for new projects.

Two senators and U.S. business groups have raised concerns that environmental reviews could delay billions of dollars in semiconductor chip factories.

“We are committed to doing everything humanly possible to move the process as fast as possible but it’s a concern and we don’t want this to hold anything up,” Raimondo told Reuters on the sidelines of an event.

Commerce released details on Tuesday of its plans to award $52 billion in chip manufacturing subsidies and research funding.

Raimondo said the department is telling companies “if they think they are going to apply (for funding) they should already have hired the consultants and the lawyers and start the process” of environmental assessments.

Companies must complete environmental assessments and “the faster they do that and get us the data the quicker we can do it,” she added.

    Senators Mark Kelly, a Democrat, and Republican Roger Wicker said in a letter to Raimondo seen by Reuters that many projects awarded funds under the CHIPS program will be subject to review under the National Environmental Policy Act (NEPA).

    “Multi-year delays from a full NEPA review undoubtedly will negatively affect the decisions of some chip manufacturers that have other locations to choose from that provide expedited permitting processes,” the senators wrote. “Given the dynamic nature of the semiconductor industry, companies cannot afford to wait to bring new capacity online.”

One semiconductor executive told Reuters companies are concerned environmental reviews could take two years and spark lawsuits from environmental groups that could add more time before construction could begin.

Those delays could make it difficult to meet a December 2026 deadline for starting work on a project to qualify for a 25% investment tax credit on manufacturing equipment destined for the factory. The credit is estimated to be worth $24 billion.

(Reporting by David Shepardson in Washington; Additional reporting by Stephen Nellis in San Francisco; Editing by Matthew Lewis)