Semiconductor chip producers must pay their construction workforce prevailing wages and will be “strongly encouraged” to use project labor agreements if they want a piece of the $39 billion available in federal funding to support fabrication plant construction, expansion or modernization projects, U.S. Commerce Secretary Gina Raimondo says.

The Commerce Dept. CHIPS Program Office released its first notice of funding opportunity Feb. 28 for projects that will boost domestic production of advanced chips used in a wide variety of consumer and military applications. It plans to provide a mix of grants, federal loans and federal guarantees of third-party loans. Direct funding awards are set to range from 5% to15% of project capital expenditures, according to department official who briefed reporters on the program. Applications will be accepted on a rolling basis starting March 31 for some types of chip plants, known as “fabs.”