Biden says CHIPS Act critical to national, economic security

President Joe Biden said during a virtual meeting Monday that the CHIPS Act, which would provide $52 billion in subsidies to domestic semiconductor manufacturers, is “really important” to national and economic security. Photo by Jemal Countess/UPI | License Photo

July 25 (UPI) — President Joe Biden stressed the importance of domestic semiconductor manufacturing as the Senate was set to vote on the CHIPS Act this week.

Appearing in a virtual meeting alongside the CEOs of Lockheed Martin, Medtronic PLC and Cummins Inc., as well as labor leaders, Biden said the bill, which would provide $52 billion in subsidies to domestic semiconductor manufacturers, was very important to national and economic security.

“To be secure that any part we’re putting in a weapons system, or a helicopter, anything we have, that we are assured that no one has been able to tamper with that. That it’s made in America, built in America, stockpiled in America, I think it’s really important” Biden said.

The CHIPS, or Creating Helpful Incentives to Produce Semiconductors for America Act, initially passed in January 2021, cleared a key procedural vote last week setting up a cloture vote requiring 60 votes in the evenly divided Senate — which would set up a final vote later this week before sending debate to the House.

Senate Democratic leader Chuck Schumer, D-N.Y., said the vote originally scheduled for Monday would be postponed until 11 a.m. Tuesday, citing severe thunderstorms on the East Coast that “disrupted the travel plans of a significant number of senators.”

“I remain hopeful that we can remain on track to finish this legislation ASAP,” he said.

The bill also includes about $100 billion in authorizations over the course of five years for programs that include expanding the National Science Foundation’s efforts to establish regional technology hubs to support start-up companies in areas of the country that haven’t historically received much tech funding.

During Monday’s virtual meeting, Lockheed Martin CEO James Taiclet said that “a robust, secure supply of microprocessors is essential both to national security and to the health of the defense industrial base and the aerospace industry as a whole.”

He added that while U.S. companies and suppliers currently have “adequate access” to semiconductors, the fact that much of the manufacturing takes place in China and Taiwan leaves access for U.S. industry, including the defense industry, in a “fragile” state.

“Should China decide to withhold its production or inhibit Taiwan from exporting its chips or building them, we would have a serious economic and eventually national security issue on our hands,” said Taiclet.

U.S. Commerce Secretary Gina Raimondo on Monday told CNBC that she was told Taiwanese chip manufacturer GlobalWafers will only follow through on its plans to build a silicon wafer factor in Texas if the measure is passed.

“This investment that they’re making is contingent upon Congress passing the CHIPS Act,” she said. “The CEO told me that herself and they reiterated that today.”

Raimondo added that the bill must be passed before Congress departs for its August recess.

“I don’t know how to say it any more plainly. This deal … will go away, I think, if Congress doesn’t act,” she said.

Major chip manufacturing companies such as Intel and TSMC have said they are already counting on funds from the bill to finance factory construction in Ohio and Arizona.

IBM this week plans to send senior executives to Washington, D.C., to push Congress to pass the bill.

“Congress has a once in a generation opportunity to reinvigorate U.S. leadership and innovation in a critical field of technology while creating good paying tech jobs nationwide,” Mukesh Khare, vice president of hybrid cloud at IBM Research said.