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Chip makers will have to provide child-care plans to seek federal money

Companies requesting more than $150 million in Chips Act manufacturing subsidies will have to spell out their child-care options for employees and construction workers

President Biden signs the Chips Act into law on the South Lawn of the White House on Aug. 9. The administration is tethering child care to certain subsidies being allocated under this law. (Demetrius Freeman/The Washington Post)
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Computer chip companies requesting millions from the federal government to build factories will have to outline a child-care plan for workers, the Commerce Department announced.

Companies seeking more than $150 million in subsidies — part of what was allocated in the $52 billion Chips Act signed last year — will need to notify the federal government “how they plan to provide child care to their employees and construction workers,” department spokeswoman Caitlin Legacki said in an email Monday to The Washington Post. The administration issued a formal announcement Tuesday.

The Chips Act, one of the largest industrial development programs administered by the federal government, is designed to subsidize U.S.-made semiconductors, which are used in cars, electronics, ATMs and a myriad other products. Intel, Micron and TSMC are among the chipmakers that have signaled plans to apply for subsidies under the new law, which already have spurred construction.

In a statement Tuesday, and in an interview with the Wall Street Journal, Commerce Secretary Gina Raimondo also emphasized how the subsidies would strengthen national security, pointing out that the United States buys most of its advanced chips from Taiwan.

“When we have finished implementing CHIPS for America, we will be the premier destination in the world where new leading-edge chip architectures can be invented in our research labs, designed for every end-use application, manufactured at scale and packaged with the most advanced technologies,” she said in a news release.

The administration had proposed lowering child-care costs for families as part of President Biden’s Build Back Better plan, but the funding was cut from it last year. Child care is difficult to find and expensive for many people in the country.

The child-care requirement for semiconductor makers, which was first reported by the New York Times earlier Monday, would affect a relatively small number of people in the United States but would extend beyond direct employees of the makers to construction workers for the plants, as well. The requirement applies to companies seeking subsidies for commercial fabrication facilities, Legacki said.

A global shortage of chips in recent years led to manufacturing disruptions and contributed to production woes for car companies.

The U.S. labor market remains tight, despite fears of a looming recession, and some employers have boosted pay, perks and benefits to attract workers. Child-care benefits, depending on how they are structured, could help semiconductor makers find employees.

Meanwhile, employment in the construction industry expanded in January, despite a slowdown in the housing market.

In its funding application released Tuesday, the Commerce Department said the child care “should be within reach for low- and medium-income households, be located at a convenient location with hours that meet workers’ needs, grant workers confidence that they will not need to miss work for unexpected child care issues, and provide a safe and healthy environment that families can trust.”

The agency said more details would be released in the coming weeks when it publishes examples of the child-care plans.

“The requirements are that the child care is affordable, accessible, reliable and high-quality,” Legacki wrote. “Within those parameters, companies will have a lot of flexibility to reflect the needs of their workforce and communities.”

The plans are not uniform and can change depending on the company and its location. They could include on-site facilities or partnerships with child-care companies, Legacki said.

Jeanne Whalen contributed to this report.