The Commerce Department is giving a selection committee more time to choose the board members for a National Semiconductor Technology Center (see 2304250032), a key piece of the Chips Act designed to bring together the government, national labs, chip companies, suppliers, academia, investors and others to collaborate on semiconductor matters. Commerce announced members of the selection committee in June and planned for the committee to “automatically terminate” by Aug. 31, but the agency said this week the committee “would benefit from additional time to complete this important task.” The termination date will now be Sept. 30.
CHIPS Act
The CHIPS and Science Act is a U.S. law signed by President Biden in August 2022. The act authorized approximately $280 billion in funding for domestic research and manufacturing of semiconductors. It included $39 billion to subsidize chip manufacturing in the U.S. and a 25% tax credit for the cost of manufacturing equipment. The bill provided $13 billion for semiconductor research and workforce training. It also invested $174 billion in public sector research in science and technology. The bill was intended to strengthen the resilience of American supply chains and to counter China.
As the Biden administration this week marked the one-year anniversary of the enactment of the Chips Act, which provides incentives and funding opportunities for the chips sector, the semiconductor industry urged the White House and lawmakers to keep foreign markets open and “advance policies that enhance this historic accomplishment.”
The Semiconductor Industry Association this week released a report on the state of the American chip industry, highlighting issues surrounding U.S. Chips Act implementation, the manufacturing industrial base, global chip demand, American technological competitiveness, geopolitical tensions impacting the industry and more.
The Commerce and Defense departments this week signed a memorandum of understanding to improve collaboration on their efforts to strengthen the American semiconductor defense industrial base, including through Chips Act funding. The memorandum will increase information sharing between the two agencies, including by allowing officials to coordinate on national security reviews of Chips Act funding applications, Chips Program Office Director Michael Schmidt said. Laura Taylor-Kale, assistant secretary of defense for industrial base policy, said it’s “essential for DoD and DoC to consult one another to ensure we are making complementary investments that support a robust semiconductor industrial base.”
Commerce Secretary Gina Raimondo this week declined to say when she expects the Bureau of Industry and Security to finalize its Oct. 7 China chip controls (see 2210070049, saying it’s more important to her that the agency takes its time and gets the updated restrictions “right.” She also said she doesn’t see Chips Act funding and restrictions on American chips sales to China as contradictory and denied reports that the administration has delayed new export controls against China in an effort to limit damage to its relationship with Beijing.
A former U.S. trade representative and treasury secretary this week cautioned the Biden administration as it prepares to introduce a new outbound investment screening regime, saying new authorities like these tend to expand over time and could eventually be used beyond their intended purpose.
Commerce Secretary Gina Raimondo, whose department is responsible for three of the four pillars in the Indo-Pacific Economic Framework, told a think tank audience that she is "determined to finalize agreements with all of these countries on all three pillars I’m managing" by a summit at the end of November. The IPEF, which does not liberalize tariffs but does seek to lower non-tariff barriers in its trade pillar, also includes a tax and anti-corruption pillar, an infrastructure and decarbonization pillar, and a supply chain pillar, which was already agreed to earlier this year.
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Proposed U.S. guardrails around the Chips Act aren’t likely to stop semiconductor companies from applying for funding, Michael Schmidt, the Commerce Department official in charge of the program, said this week. While Semiconductor Industry Association CEO John Neuffer agreed, he also urged the government to coordinate any chip-related restrictions with trading partners or risk U.S. companies losing Chinese market share, calling the idea of decoupling a “protectionist fairy tale.”
The Commerce Department should use the Entity List and potentially its anti-boycott regulations to respond to Beijning’s restrictions on U.S. chip company Micron (see 2305220053 and 2305240002), Reps. Michael McCaul, R-Texas, and Mike Gallagher, R-Wis., said in a June 1 letter to Commerce Secretary Gina Raimondo. The lawmakers said it’s time for the U.S. and its partners to “firmly push back” on China’s “economic coercion, adding that it "can no longer sit on the sidelines as the [People’s Republic of China] selectively targets U.S. and allied entities with the goal of intimidating our businesses and harming our economic security.”