White House Presses Congress on Chip Funding

The White House is pressing Congress to pass legislation with $52 billion for U.S. chipmaking (see 2106090007), White House National Security Council Senior Director-International Economics and Competitiveness Peter Harrell told an AT&T livestream event Thursday. “The bigger picture is we’ve got to get the funding across the finish line,” he said. “Congress has to get the funding across the finish line, and we have to move on expanding capacity here at home and with our allies.”

The Senate in June approved the U.S. Innovation and Competition Act (S.1260) and $52 billion in funding. The House is yet to act. The Commerce Department in September issued a request for information about the chip supply shortage. Comments are due Monday. Harrell said the RFI is an effort to find answers to concerns about the shortage: like “ghost orders,” double-booking and rumors of “hoarding.” The administration wants to understand what’s happening in the market before consulting more with industry, he said. Five tech and business groups wrote Commerce Secretary Gina Raimondo Wednesday urging for the careful handling of "sensitive data" in the RFI (see 2111040007).

Commerce is doing what it can to prepare for eventual passage, though there are limits to what it can do without the funding approved, said Sree Ramaswamy, senior policy adviser to the department's Office of Policy and Strategic Planning. He noted the bill language could change, so Commerce doesn’t want to “get ahead of itself.”

China’s goals in becoming self-sufficient in chip manufacturing are cause for U.S. concern, said Ramaswamy. “We know that they are concerned about their position in the supply chain,” he said. “We need to be engaged. This is a global supply chain.”

It’s an issue that affects everything from smart devices and 5G networks to cars and Wi-Fi, said Intel Global Executive Director-Digital Infrastructure Policy Jayne Stancavage. “We’re at a 30% cost disadvantage, at least, compared to Asia,” she said. “It’s absolutely critical we do something now to address this because it is here, it is real and it affects all of our lives every day.”

It costs up to 40% more to build a fab, or manufacturing plant, in the U.S. than “overseas,” said Semiconductor Industry Association CEO John Neuffer. Other governments have been offering “huge manufacturing incentives” for decades to attract companies to build in their markets, he said. “Our government has not been doing this.” He urged passage of the Chips for America Act (S.3933) (see 2107220005) and the Facilitating American-Built Semiconductors (Fabs) Act (see 2110290029). “We and virtually every other sector see this as an urgent matter, and we really hope it gets done in 2021,” he said.