Biden’s chips program has “woken up,” Republicans claim

The government has countered that these elements of the funding guidelines announced on Tuesday will increase the likelihood of attracting companies to build the fabs and people to work there – a key challenge that could determine the program’s success. She sees the guidelines as a starting point for working with companies to ensure added value for taxpayers.

The tension is an example of the partisan distrust that can arise in Washington even over an agenda item that lawmakers from both parties say is vital to U.S. national security. Republicans say the government’s enactment of the law is trying to inculcate priorities that appeal to the Democratic base. They also argue that the guidelines will increase the cost of building semiconductor fabs and will poison any sense of lasting confidence.

“What President Biden is doing, wedged awake and green agenda items into legislation we pass, makes it harder for him to ever legislate again,” said Sen. Mitt Romney, R-Utah, who voted in favor of the bill.

But broadly speaking, government officials say the policies can help address two fundamental challenges to the government’s plans to make the United States the world’s leading maker of advanced computer chips: the companies need skilled workers, and they need innovations that can downsize production costs.

If the investments are to be successful, Commerce Secretary Gina Raimondo said, companies need to find and train tens of thousands of workers, from welders to electrical engineers. More importantly, the industry needs scientific breakthroughs to halve the cost of making chips so the US can compete with Asia, Raimondo said in an interview with The Associated Press before the guidelines came out.

“Innovation comes from solving big, fat problems, like halving the cost of chip production,” Raimondo said. “We have to do that.”

The money for the factories comes from the CHIPS and Science Act, which President Joe Biden signed into law last August. That includes $11 billion for research, in addition to $39 billion for building advanced computer chip factories. Tax incentives bring the total investment to $52 billion.

Chips are integrated circuits embedded in a semiconductor, a material – specifically silicon – that can control the flow of electrical current. The terms “chip” and “semiconductor” are often used interchangeably. Computer chips are used in everything from cars to toys to advanced weapons, making them as fundamental to the digital age as iron and steel was to the industrial age.

Government officials said factories could have an easier time attracting workers if childcare for parents is offered at an “affordable” rate from companies that would receive $150 million or more in government support. Likewise, money-seeking companies will be given preferential treatment if they use collective bargaining agreements for construction, a boost for construction unions. The White House said in a 2022 executive order that it can ensure projects are completed on time.

An administration official, who spoke on condition of anonymity to have private conversations, said no potential applicant had complained about the childcare. The official added that TSMC and Samsung – two possible applicants – already offer childcare at their facilities in Taiwan and South Korea, respectively.

Researchers at the Center for Strategic and International Studies, a think tank focused on national security, called the childcare facilities necessary for the “fabs,” as the chip industry calls factories.

“It is not, as some have wrongly argued, a question of social policy,” wrote Sujai Shivakumar and Charles Wessner, both of CSIS. “It’s a pragmatic move, clearly aligned with the nation’s security interests, to build the workforce needed to build the factories and produce the chips our country runs on.”

According to the Department of Labor, there are around 360,000 jobs in semiconductor manufacturing. Announced projects linked to the possibility of government support could create 200,000 more jobs, including 36,000 directly tied to computer chips, according to a report by the Semiconductor Industry Association.

The same report found that the US leads the way in terms of chip design and the equipment used to manufacture them. But more than 70% of the world’s chips come from China, Japan, Taiwan and South Korea — an economic and military weakness for the US

Senator Thom Tillis, RN.C., said mandates to access state support would increase the cost of completing factories planned by Intel, Micron and Wolfspeed to make silicon wafers in his state.

“We start by discounting the value of the investment that we’re making,” Tillis said. “I think what we’re doing is social engineering.”

Support for computer chip legislation was bipartisan. 17 Republican senators joined the Democrats in supporting the bill. 24 Republicans in the House of Representatives voted in favor of the law.

Asked if the law could be overturned by politics, Raimondo said: “You always worry. Washington is unpredictable. And politics is crazy.”

Senator John Cornyn, R-Texas, who voted in favor of the bill, said he’s exchanged text messages with Raimondo since the guidance came out, telling her “that when the government does things like this, our ability to work together really changes.” undermines a bipartisan basis for passing legislation.”

Cornyn said he’s aware that Raimondo “isn’t in charge,” but he hopes she sends the message of Republican frustration to the White House. He admitted he’s still evaluating the guide and trying to figure out “what difference it makes.”

Sen. Lindsey Graham, RS.C., said he voted to “give us the skills we don’t have,” not the “union agenda” he sees embedded in the application process.

Graham said Republicans have recourse to ensure the government is aware of their objections, potentially taking the dispute well beyond computer chips: “Hold every candidate, make life miserable,” he said.

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