CHIPS Act and Onward: Next Steps to Reshore Semiconductor Manufacturing


Congress is moving toward approving funding for the 2020 CHIPS Act to reshore semiconductor chip production to the United Stated to address current shortages and long-term supply challenges.  Once the funds are appropriated, the Executive Branch will have to implement the CHIPS Act expeditiously to rebuild leading edge manufacturing capacity in the U.S, and work with Congress to develop a long-term strategy to restore America’s semiconductor leadership and secure supply chains for the U.S. and its friends and allies.

To discuss the way ahead, the American Semiconductor Center, a new project of SAFE Commanding Heights, on February 18th brought together a distinguished group of experts from government, industry, and the national security world for a 360 degree look at the problem.

After a recorded message from CHIPS Act sponsor Sen. Mark Warner (D-VA), moderator Dr. Jeb Nadaner, Executive Director of SAFE Commanding Heights, talked with the Secretary of Commerce’s Senior Advisor, Sreenivas Ramaswamy; Michael Splinter, former Chairman and CEO of Applied Materials, and a Director at TSMC; and Admiral Jonathan Greenert, USN (Ret.), the former Commander of the U.S. Navy’s 7th Fleet in Japan, and the 30th Chief of Naval Operations. Mr. Splinter and Admiral Greenert co-chair the American Semiconductor Center.

Sen. Warner and the Commerce Department’s Mr. Ramaswamy underlined the urgency for Congress to move quickly to approve the CHIPS Act funding. Commerce is engaging extensively with industry and preparing to implement the legislation, Ramaswamy said. Challenges include building up Commerce’s expert staff once the funding is approved, industry workforce issues, and the time required to build the complex, capital-intensive foundries, or “fabs.” Given the high CAPEX requirements, more private capital is needed too.  But “the investments that we need to make are too important to get tied up in process.”

Mr. Ramaswamy also emphasized the importance of participation by non-U.S. industry leaders in the manufacturing and R&D sides of the CHIPS program.  Secretary Raimondo “has been pretty clear that we welcome foreign investment.”

Mr. Splinter emphasized that the way ahead is a long-term process that should include leveling the playing field in costs in the United States for manufacturers at the leading edge, like TSMC, Intel, and Samsung, adding capacity in older chips in the 5–10-year range (10 to 28 nanometers), and, for technologies older than 10 years, customers working with  suppliers to increase capacity and move to new technology to relieve current shortages.

Like Mr. Ramaswamy, Mr. Splinter emphasized the critical role played by semiconductor makers and customers, in particular the Semiconductor Industry Association (SIA), in driving and informing the debate.

Following the government and industry perspectives, Admiral Greenert added a detailed national security angle on threats to America’s semiconductor supply chain, notably the potential threat to Taiwan, which makes most of the world’s most advanced chips, from the People’s Republic of China. These threats arise, the Admiral noted, from America’s “unsustainable dependency” on chips from across Asia.

Read the transcript here

For the full discussion, please watch the video below.

This event is the first in a series presented by the American Semiconductor Center.