Some Applicants May Not Get Any Funding Through Chips Act, Program Official Says
The Chips and Science Act offers $39 billion to boost the U.S. semiconductor industry, but many applicants could come away empty-handed, said Michael Schmidt, director of the Commerce Department’s CHIPS Program Office, at an Information Technology and Innovation Foundation conference Wednesday.
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“We are going to have to make tough choices -- there are going to be a lot of really high-quality applicants that are not going to get as much funding as they might hope; a lot of good applicants may get no funding at all,” Schmidt said. The amount in the fund is “a very large sum in absolute terms,” but a “small fraction of what we’re going to see in terms of semiconductor investment” over the next decade, he said.
The Chips Act is “really a fundamentally unique, transformative piece of legislation,” said ITIF President Robert Atkinson: “It’s a big deal, and it really requires careful implementation.”
“Chips is a public investment in private industry of a scale and significance that we haven’t seen in recent times in our country,” Schmidt said. The U.S. used to be a major producer of semiconductors “at globally significant volumes” but now produces only 10% of all chips and none of the most advanced chips, he said: “Chips is a statement by Congress and the president that says that we need to change that status quo.” His office has about 80 people, with 150 expected by the end of the year, he said. “We are poised to engage with our applicants and potential applicants,” he said.
Sen. Todd Young, R-Ind., who led work on the Chips Act, said the objective wasn’t to make the U.S. independent of other nations on semiconductors. “We wanted to take some risk out of the system so that it’s more manageable should China, or a global pandemic, again, interrupt these supply lines,” he said. “We wanted to create a platform … for collaboration with other countries,” he said: “We wanted to relearn some of the manufacturing expertise that we had forgotten over the years so that we have the ability to make the high-end chips.”
Sen. Chris Coons, D-Del., said Young deserves credit for providing leadership in the Senate on the Chips legislation, a “signature” bill for the Biden administration, despite “partisan sniping.” Much remains to be done, Coons said. “This isn’t happening in six months -- it isn’t happening in two years, you know that,” he said. “But for too many of my colleagues they think, ‘Oh yeah, we’ve done it,’” he said.
“We might very well enjoy close alignment” on advanced technologies between the U.S., Japan and South Korea, and better regional security, Coons said. But he said his first visit as a senator to Taiwan, where most advanced chips are made, left him thinking: “Wow, are we exposed and vulnerable should this island no longer be connected to the world economy and completely controlled by a power [China] not aligned with our interests.”