The CHIPS Act is Not A Quick Fix
Applied Materials made comments during a webinar held on February 18 by SAFE Commanding Heights, self-described as a “non-partisan initiative dedicated to advancing critical supply chains for America’s transportation and energy needs,” focused largely on support for the CHIPs for America Act, passed by the House of Representatives in early February. It plays a large role in Intel’s recent announcement of a $20 billion investment in a new microchip production facility or “fab” in Licking County, Ohio.
According to a senior advisor to the U.S. Secretary of Commerce, also speaking from the webinar, the government still wants to hear more from customers, investors, universities and entrepreneurs about various aspects of the CHIPs program like workforce considerations, attracting private capital and how to change the fundamental economics of the semiconductor industry.
“We certainly want to solve for the manufacturing capacity and the technology leadership. But can we use this opportunity also to solve for some of these longer-term issues so that we don’t have to deal with these sorts of problems in the future,” said the senior advisor. If the CHIPs Act is funded, then begins the recruitment of subject matter experts to staff up offices and allow the Commerce Department to begin engaging with a “really complex supply chain.”
This is not a challenge the U.S. can handle entirely on its own. “It’s pretty obvious that there are portions of the supply chain where, if you’re really serious about shoring up capability for the U.S. you’re going to need foreign companies to participate, whether that’s in the tools, in some of the upstream chemicals deals, in the actual fabs and the processes themselves,” the senior advisor said.
The U.S. will also need to coordinate efforts with allied nations taking their own steps to support the semiconductor industry. “There’s a lot of discussion going on at the government level of how we do this so that there’s actually some level of coordination, that it isn’t a race to the bottom, that we don’t end up inadvertently over-supplying the industry and then destroying the economics of the industry,” said the senior advisor.
Applied Materials adds that China is investing heavily in product innovation, such that the U.S. cannot be complacent about taking steps to defend this lead position while also stepping up manufacturing. More funding and encouragement for R&D to attract Samsung, Intel and TSMC will encourage bleeding-edge semiconductor research in the U.S. More PhDs in the physical sciences will support those efforts. The CHIPs Act supports these measures.
“Intel, they manufacture here and have a system developing new technologies and manufacturing them here. For Samsung and TSMC, that’s not the case,” Applied Materials says. “Their R&D is done in Korea and Taiwan respectively. And moving these advanced technologies to a factory on a different continent is an incredibly delicate process.”