Last August, President Biden took a critical step to usher in a new era for U.S. manufacturing and the innovation economy and ensure U.S. leadership with the enactment of the CHIPS and Science Act. This landmark law’s bold and critical investments were designed to construct needed fabs to stabilize the domestic supply of semiconductors – the key building block upon which the entire digital economy is based. One year later, the bipartisan effort has already yielded tangible results, but important work remains to help make its implementation successful.
The entire CHIPS effort, spanning two laws – the CHIPS for America Act of 2020, which created the semiconductor grant program to aide semiconductor fab construction, and the CHIPS and Science Act of 2022, which funded CHIPS for America and authorized new programs aimed at strengthening the United States’ science research and development (R&D) infrastructure – have resulted in over 50 new semiconductor ecosystem projects across 20 states totaling more than $200 billion in private investment that will result in over 40,000 new jobs. Their enactment was a model of bipartisan U.S. leadership that has already begun to address supply chain constraints and enabled the global semiconductor industry to be more geographically diverse, safer, and reliable. U.S allies, such as the EU, have also enacted their own semiconductor focused legislation, which highlights the strategic importance of the semiconductor industry in shaping economic growth, and global competitiveness in the 21st century.
Despite such significant progress, U.S. policymakers can’t let up on the gas yet. Specifically, officials in the both the legislative and executive branches must prioritize key measures to advance fab construction, fund a broader array of science R&D-related programs, build a stronger STEM workforce pipeline, and support the overall implementation of the semiconductor incentives program.
While construction projects are springing up all around the country by leveraging the CHIPS investment, misapplied environmental regulations could delay those projects for years – eviscerating their utility. Fortunately, bipartisan members in the U.S. House of Representatives and Senate have recently introduced the Building Chips in America Act, which would clarify environmental permitting requirements to streamline approval processes while maintaining strong environmental controls for fab construction. We urge Members of Congress to pass this critical measure.
To help the U.S. stay competitive in emerging technologies, lawmakers need to fully fund the science R&D provisions and STEM workforce pipeline-related programs outlined in the law (Division B). Programs administered by the National Institute of Standards and Technology (NIST), the National Science Foundation (NSF), the Department of Energy (DOE) and the Department of Commerce’s Economic Development Administration (EDA) collectively have an outsized impact on developing new technologies and training scientific leaders of tomorrow. We urge the U.S. Congress to seize the opportunity to fully fund these programs in the Fiscal Year 2024 appropriations bills.
Relatedly, the administration should invest in additional STEM education and workforce development programs to ensure that the U.S. has the skilled workforce it needs to compete in the global semiconductor industry. For example, advancing the CHIPS for America Workforce and Education Fund would help develop the domestic semiconductor workforce by leveraging activities of the National Science Foundation. Further, we urge policymakers to enact high-skilled immigration reform that would attract the best talent from around the world.
The Biden Administration must take charge of implementing the CHIPS and Science Act in a way that fully unleashes the potential envisioned by Congress. To that end, the administration should reconsider any potential restrictions on expanding manufacturing facilities and R&D activities (with respect to legacy semiconductors) in China which can disrupt the supply of legacy chips and negatively impact U.S manufacturing and downstream economic activities.
The CHIPS and Science Act stands as a testament to the power of bipartisan collaboration and visionary leadership. It will strengthen the United States’ innovation ecosystem, improve its national security capabilities, and help the country maintain a competitive edge. Its enactment has already resulted in substantial progress towards strengthening the semiconductor industry, creating jobs and fostering global cooperation. It is now up to all stakeholders to build on its momentum and embrace the opportunities it offers for a stronger and more competitive future.