CHIPS Act What’s Next

CHIPS Act What’s Next

By The Fatty Fish Editorial Team - January 7, 2023

In an industry that is viewed as essential to national and economic security, U.S. semiconductor manufacturing capacity has dropped from nearly 40% of global supply in 1990 to 12% today. The Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022 aims to invest $52 billion in the semiconductor industry over a five-year period, with the goal of increasing domestic production and reducing reliance on foreign manufacturers. The act also aims to improve R&D efforts and workforce development in the semiconductor industry. The CHIPS Act is seen as a crucial step in maintaining U.S. technological competitiveness in the global market but is not without implementation challenges. Here are a series of opinion pieces we found of interest relating to the challenges facing the CHIPS Act success.

The CHIP Act’s Next-Generation Ambitions Require a Modern Workforce

In an opinion piece for The Hill, “The CHIP Act’s next-generation ambitions require a modern workforce,” John R. Dearie, president of the Center for American Entrepreneurship, discusses the importance of a modern workforce to achieve the goals of the CHIPS Act, which aims to boost the domestic semiconductor industry. Although he believes the CHIP Act’s investment of $280 billion to bolster R&D, secure America’s access to the advanced semiconductors that power everything from smartphones to fighter jets and create 20 regional innovation hubs is an important step, he is concerned that America lacks the skilled workforce to carry out the plan. Dearie argues that a skilled and diverse workforce is crucial to maintaining America’s technological leadership and competitiveness in the semiconductor industry. He emphasizes the need for investing in education and training programs and for increasing diversity and inclusion in the industry. Read the full article on The Hill.

Funding the CHIPS and Science Act Is a National Security Imperative

In an opinion piece for The Hill, “Funding the CHIPS and Science Act is a national security imperative,” Keith Krach, former Under Secretary of State and co-leader of the Global Tech Security Commission, and Bob Hormats, former Under Secretary of State, argue that Congress needs to fully fund the CHIPS and Science Act. The science part of the act, which provides R&D investment and workforce training programs in critical security sectors such as quantum, cyber, artificial intelligence, 6G, biotech, robotics, hypersonics and autonomous vehicles, has not been funded and depends on congressional appropriations.

They emphasize that this legislation will supercharge U.S. semiconductor production and boost the next generation of technological research to maintain the U.S. competitive edge over authoritarian adversaries such as China. But the authors argue that without fully funding the bill, the U.S. will not be able to fulfill the promise of the CHIPS Act. Read the full article on The Hill.

After the CHIPS Act: The Limits of Reshoring and Next Steps for U.S. Semiconductor Policy

In an opinion piece for Carnegie Endowment for International Peace, “After the CHIPS Act: The Limits of Reshoring and Next Steps for U.S. Semiconductor Policy,” Vishnu Kannan, special assistant to the president at the Carnegie Endowment for International Peace, and Jacob Feldgoise, a James C. Gaither Junior Fellow in the Carnegie Asia Program, argues the choices U.S. leaders make today in implementing the CHIPS Act will determine whether the country can maintain its innovation leadership in the semiconductor industry over the long term and the security and continuity of the domestic economy during a crisis. They emphasize that the implementation challenges require careful consideration and continuous effort for its success.

The authors discuss the limitations of the CHIPS Act, which aims to incentivize the domestic production of semiconductors in the U.S., and they suggest next steps for U.S. semiconductor policy. They add that the U.S. needs to focus on diversifying its supply chain, investing in R&D and talent development and strengthening international partnerships to address the semiconductor shortage in a sustainable manner. Read the full article on Carnegie Endowment for International Peace.

The CHIPS Act Alone Won’t Secure U.S. Semiconductor Supply Chains

In an opinion piece for The Hill, “The CHIPS Act alone won’t secure US semiconductor supply chains,” Jared Mondschein, physical scientist at the nonprofit and nonpartisan RAND Corporation, suggests that although the CHIPS Act is a good start to secure the U.S. semiconductor supply chain, it is not enough on its own. He recommends the U.S. government take a comprehensive approach, including investing in R&D, strengthening relationships with allies, and improving domestic manufacturing capabilities. Additionally, Mondschein emphasizes the need for a long-term strategy that considers the fast-changing nature of the semiconductor industry. He adds that without such a strategy, the U.S. risks falling behind in a critical sector that is essential to national security and economic competitiveness. Read the full article on The Hill.

Disclosure: Fatty Fish is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

The Fatty Fish Editorial Team

The Fatty Fish Editorial Team includes a diverse group of industry analysts, researchers, and advisors who spend most of their days diving into the most important topics impacting the future of the technology sector. Our team focuses on the potential impact of tech-related IP policy, legislation, regulation, and litigation, along with critical global and geostrategic trends — and delivers content that makes it easier for journalists, lobbyists, and policy makers to understand these issues.