CHIPS Funds for Buybacks?

A group of Congressional Democrats is calling on the Commerce Department to prevent funds intended to promote semiconductor manufacturing in the United States from being used to directly or indirectly subsidize corporate stock buybacks.

In a letter to the Director of Commerce’s CHIPS program Office, Michael Schmidt, the lawmakers said that the largest US semiconductor economies have spent hundreds of billions on stock buybacks in recent years. Buybacks by CHIPS recipients threaten to undermine the critical economic and national security goals of the CHIPS Act and enrich corporate executives and shareholders at taxpayers’ expense, according to the lawmakers. The letter urges the CHIPS Program Office to consider the following provisions when finalizing its Notice of Funding Opportunity and implementing the CHIPS program:

• ensure CHIPS fund recipients do not engage in stock buybacks; 
• restrict CHIPS awardees from engaging in stock buybacks for at least 10 years; 
• implement additional restrictions on buybacks;
• require CHIPS awardees to certify that they will not conduct stock buybacks
• Signing the letter are Democrats Sens. Elizabeth Warren (Mass), Tammy Baldwin (Wisc), Ed Markey (Mass) and Independent Bernie Sanders (Vt), along with Reps. Sean Casten (Ill), Bill Foster (Ill), Pramila Jayapal (Wash) and Jamaal Bowman (NY).