The Commerce Department on Tuesday opened an expected funding opportunity aimed at rebuilding the domestic semiconductor industry, which has increasingly moved offshore, a weakness in U.S. supply chains that became glaringly apparent during and after the COVID-19 pandemic when manufacturers of everything from automobiles to fighter aircraft suffered from a scarcity of computer chips used in production of their products.

The $39 billion initiative to boost the U.S. semiconductor industry is part of a $50 billion program Congress and the Biden administration agreed to last year to rebuild domestic capacity around computer chips through the bipartisan CHIPS and Science Act.

The first CHIPS for America funding opportunity “seeks applications for CHIPS Incentives that will support investment in the construction, expansion, and modernization of commercial facilities in the United States for the front- and back-end fabrication of leading-edge, current-generation, and mature-node semiconductors,” says a notice published by the Commerce Department’s National Institute of Standards and Technology, which is managing the effort.

The impact of the COVID-19 pandemic caused labor issues worldwide that choked the supply chain for semiconductors at multiple nodes such as different manufacturing facilities and seaports, causing supply shortages of the computer chips. While the U.S. leads in the design of compute chips, it manufactures only 12 percent of the devices and companies in South Korea and Taiwan build the smallest semiconductors.

Concerns about China’s plans to someday attack Taiwan, which is only 100 miles off the Chinese coast, and bring that island nation under its control, are also driving the desire to on-shore more semiconductor manufacturing in the U.S.

Supply chain impacts, including related to computer chips, have weighed on the operations of the U.S. defense industrial base (DIB) for nearly three years, although these challenges have begun to ease.

Awards made through the initial CHIPS for America opportunity include direct funding, federal loans, and government guarantees of third-party loans. The Commerce Department says the federal funding will complement, not replace, private investment. It also says that awards will follow once applications “can be rigorously evaluated and negotiated.”