Remarks as prepared.
We have several good examples that are etched in our history when the government has made big bets in the U.S. science and technology enterprise. We know these well.
The Manhattan Project was formalized by President Roosevelt in a frantic attempt to beat the Germans at a nuclear weapon, and to decisively end a horrific world war that took more than 50 million lives. President Truman used the bombs to avoid an invasion that he felt would have much higher toll for the people of both America and Japan.
After the war, the U.S. committed to continue to fund nuclear research and development. This program attracted top scientific talent from across the world and built new scientific facilities across the nation to lead in nuclear and energy research for decades to come, including Argonne National Lab, the country’s first national lab.
The program funded first in 1942 cost an estimated $367 billion in today’s dollars.
Almost 20 years later, President Kennedy announced a new project to put a man on the Moon and bring him safely back to Earth. When President Kennedy addressed Congress in a now very famous speech, he said: “I believe we possess all the resources and talents necessary. But the facts of the matter are that we have never made the national decisions or marshaled the national resources required for such leadership. We have never specified long-range goals on an urgent time schedule, or managed our resources and our time so as to insure their fulfillment.”
This project showed us the potential to explore space and put the U.S. in position of global scientific leadership while inspiring generations to come.
The cost in today’s dollars for that program: $230 billion.
Almost 30 years later, in President Bush’s term, the Human Genome Project launched. This big bet was funded with an estimated cost in today’s dollars of $7 billion. This project unlocked the potential of genomics for understanding and treating disease; led to new tools for genome sequencing that catapulted a new industry; and resulted in many new genomics technology companies. The global genome sequencing market size in 2022 was about $28 billion, according to a report by Grand View Research, with the U.S. leading with 42% of revenue share in 2021 — and this does not account for other markets resulting from discoveries made by genome sequencing.
And now here we are, more than 30 years after the Human Genome Project, announcing another big bet by the U.S. government: This time to reclaim our position as the global leader in advanced semiconductor electronics through the CHIPS Act, bipartisan legislation announced by President Biden in August of 2022. The cost of this program today is $52 billion.
So what prompted the U.S. to take this big bet at this time in our history?
Right before President Biden came into office, the Council on Competitiveness released a report titled “Competing in the Next Economy.” The report states, “At the same time the United States faces unprecedented opportunity for progress, it also must confront a set of new competitive realities. A rapidly strengthening China seeks global technology leadership as part of its quest to become the world’s economic, military and geopolitical leader and shaper of the foundational rules for the next global economy.”
And even though I saw this graph a thousand times while participating in one of the working groups for the report, I am still amazed when I see the data regarding R&D investments made in China, compared to the U.S. This is a clear priority for China.
Against this backdrop, recent events have exposed tremendous pressures on our economy. In addition, the U.S. is facing many threats despite our longstanding dominance in research innovation.
First, the nation is at a critical juncture with respect to our competitive position in today’s global economy.
Today, we face significant competition in technology innovation, so navigating the global digital transition will be critical to our national security and economic competitiveness.
Concerns associated with increasing global competition have only been amplified when we look at the fragility and lack of resilience in our supply chains — as disruptions caused by the pandemic, various natural disasters, lack of domestic manufacturing capability, and geopolitical instability over the last few years are still being felt today.
Many of the shocks to our economy in the past several years were due to shortages of the semiconductor chips we need to power our industries — chips for automobiles, for critical medical devices, for critical infrastructure ... and everything else that relies on chips — which is just about everything, from the simplest devices to the most complex.
And to put numbers behind this, while we consume 30% of the world’s supply of chips, we produce only about 12% of that supply today, leaving us very vulnerable to the global shocks that we have witnessed recently.
And it is not just yesterday’s technologies that rely on chips — all of our most important critical and emerging technologies rely on semiconductor electronics, including the very specialized chips that support AI, biotech and the emerging quantum economy.
Industry and government representatives came together to respond to the chip shortage that rocked so many U.S. industries over the past few years. These discussions led to the CHIPS for America Act, first authorized in the 2021 National Defense Authorization Act, then passed as the CHIPS and Science Act and signed into law by President Biden on Aug. 9, 2022.
As the president said during the signing of this historic piece of legislation, the innovations from this act will help “lead the world in future industries and protect our national security.”
This is a $52B investment in the future of semiconductor electronics in the U.S., and therefore an investment in the technological leadership that underpins our national and economic security.
I think it is important to remember that other countries are launching their own “chips acts.”
So we have a lot of competition. At the same time, this is not a zero-sum game, so we are working across the Department of Commerce and with the State Department to develop a strategy for coordination globally. We don’t want to incite a chips war across the world when we have strong partners to work with.
The act provides the Department of Commerce and NIST with $50 billion in funding over the next five years. $39 billion will go to a financial incentives program, and more than $11 billion will support R&D programs.
$39B in manufacturing incentives is targeted at bringing back manufacturing of semiconductor chips to the U.S.
Why is it important to bring back semiconductor manufacturing the U.S.?
To address this, I want us to think back to the time when semiconductor electronics were invented in the U.S. and reiterate a few of the things that the secretary said last week in a speech at Georgetown University. New companies were popping up in what is now Silicon Valley. Universities established new departments to build the talent for the growing industry — computer science, electrical engineering, and materials science.
And what we all forget now is that it was manufacturing — not software or algorithms — that powered this engine of innovation.
Incremental innovations in manufacturing techniques were made every day, and this resulted in improved scaling and yield. These innovations were born out of the expertise that came directly from producing millions of wafers.
This intimately linked lab-to-fab and fab-to-lab innovation is what the U.S. became known for and what has built the foundation of our innovation ecosystem that is the envy of the world.
But what was once a self-propelling engine of innovation and manufacturing/engineering fell out of balance. And if you fast forward to today, we have no capacity in the U.S. to produce the most advanced chips. So our design companies go overseas to produce them, and we have lost that virtuous cycle of discovery, iteration, improvement and advancement, then discovery. …
Which leads me to the $11B that is targeted to create the R&D ecosystem that will keep companies here in the U.S. to support the next discoveries and advancements that will keep us in a leadership position globally.
Workforce development cuts across all of these programs to ensure that there are highly skilled workers to fill the jobs we will create here in the U.S.
The programs shown here are the ones being administered by the Department of Commerce. There is an additional $2 billion for secure chips and commercialization of microelectronics R&D that is being administered by the Department of Defense, and many of you have probably already seen their announcements on the DOD Microelectronics Commons.
Collectively, these programs are intended to help restore U.S. semiconductor manufacturing capacity and create a robust collaborative research effort that will help capture our fair share of leading-edge technologies.
For NIST, stewardship of the CHIPS Act is a sign of the trust that Congress and the administration have in us, based on the reputation that we have built up over more than a century of hard and diligent work. This will be a transformative opportunity for the nation and for NIST, one that will benefit our R&D efforts in all areas.
It has been an intense six months since the passage of the CHIPS Act, and as a result of all of this work, which includes extensive outreach and engagement with the community, you will see several key announcements from the CHIPS program in the next month.
This week, we announced our first funding opportunity for the $39 billion portion of the program — the CHIPS manufacturing incentives — the portion of the funding meant to bring back semiconductor manufacturing to the U.S.
This first Notice of Funding Opportunity (NOFO) is focused on bolstering the chip manufacturing capability and capacity that we know is critical to our country’s economic and national security.
So this funding opportunity is for incentives to construct, expand, or modernize commercial facilities for leading-edge, current-generation, and mature-node semiconductors. This includes both fabrication of semiconductors and advanced packaging of semiconductor devices.
Now, while the first funding opportunity is directed toward chipmakers, we know the broader semiconductor supply chain and R&D efforts are essential to creating a competitive ecosystem for semiconductor manufacturing. Therefore, in the late spring, we plan to release another funding opportunity focused on materials suppliers and equipment manufacturers.
And in the early fall, we plan to announce a funding opportunity to support the construction of semiconductor R&D facilities that will further strengthen the U.S. semiconductor ecosystem.
Each funding announcement will provide the details that entities need to apply for CHIPS incentives.
Now, if you qualify for ANY of these three funding opportunities, you can already file a statement of interest with Commerce. We want to hear from everyone across the semiconductor supply chain to inform us of their anticipated interest in CHIPS incentives funding. This will be critically important for us to determine the needs of these other parts of the industry and plan for the second and third NOFO.
And wherever you are in the supply chain, I invite you to read the current NOFO, which can get at CHIPS.gov.
Specifically, this funding opportunity seeks applications that demonstrate:
First and foremost, the ability to bolster our economic and national security. We need to meaningfully increase U.S. semiconductor production, with a particular emphasis on projects that will mitigate risks from supply chain shocks associated with the geographic concentration of current semiconductor production, and give the government access to safe, secure, and domestically produced chips.
The second thing we are looking for is commercial viability of these projects.
With respect to financial strength, we look for projects that that maximize private-sector contributions and minimize the need for government incentives. When we do this right, we are catalyzing private investment, not replacing it.
We need to see evidence of project technical feasibility and readiness with clear execution plans that leverage state and local incentives.
In the area of workforce development, which I think academia should be interested in: Applicants should provide plans to develop the construction workforce and the technical workforce and do this in an inclusive way.
And finally, broader impacts: We are interested in how projects will make a difference in areas like research and development, opportunities for small businesses, environmental stewardship, and community vitality.
In the next few slides, I want to talk in a little more detail about a few of these: workforce development, and what we mean by broader impacts.
We are anticipating hundreds of thousands of new jobs created with these incentives and we need to fill those jobs. This is a difficult task given the fact that it is hard to find a pipeline to jobs in a manufacturing sector that has largely left the U.S. And on top of that, we hear from deans all over the country that students today are more attracted to software — demonstrated by the enormous growth in enrollments across the country in computer science programs. But we have to figure out that pipeline. We know that diversity results in more innovative and successful outcomes, so we want to draw in people from all over the country and from all backgrounds to meet this demand.
For the facilities workforce, each applicant must also create a workforce development plan to articulate the approach to meeting their facility workforce needs.
With these manufacturing incentives, we want to see commitments to recruit, train, hire, and retain workers in good jobs at these facilities which will necessitate building new pipelines for workers, including specific efforts to attract economically disadvantaged individuals.
We are looking for partnerships for workforce development in these proposals, and these strategic partners can include:
And finally, because child care is critical to expanding employment opportunity for economically disadvantaged individuals, the CHIPS program requires that any applicant requesting direct funding over $150 million provide access to affordable child care for facility and construction workers.
CHIPS for America is committed to building strong communities that participate in the prosperity of the semiconductor industry, as well as ensuring that taxpayer investments maximize benefits for the U.S. economy. In particular, we are interested in how projects will create broader impacts across the following dimensions:
And this leads to our vision for success for this part of the program that is outlined in a document that we released this week on CHIPS.gov.
In the Vision for Success paper we released this week, we laid out four key targets that we believe we must meet by the end of the decade.
Now I want to discuss developments in the CHIPS for America Research and Development program.
The NIST CHIPS Act R&D programs will address five cross-cutting issues that we identified through extensive interaction with members of industry, academia, and other government agencies.
To address those ecosystem gaps, as you have seen, CHIPS for America will invest in four overlapping entities, all of which include some aspect of workforce training.
These programs will share infrastructure, participants, and projects. They will operate in coordination with each other, with the CHIPS for America manufacturing incentives program, and with microelectronics R&D programs supported by other U.S. federal agencies, including the Microelectronics Commons investments by DoD.
I’ll talk about each of the entities in more detail in upcoming slides.
All being designed concurrently, and connected together working with recommendations from the community through RFIs, workshops, the industrial advisory committee, PCAST and other sources including visits with CEOs of large and small companies, as well as university leaders.
We are working diligently to coordinate with interagency partners — DOD, DOE, NSF — to make sure our investments are coordinated and not competing.
Starting first with the NSTC: The NSTC is a multibillion dollar investment and is envisioned as the anchor for the CHIPS R&D program.
The NSTC will be a public-private consortium that provides a platform where government, industry, customers, suppliers, educational institutions, entrepreneurs, workforce representatives, and investors all converge to address the semiconductor ecosystem’s most pressing challenges and opportunities.
As specified by statute, the NSTC will develop a comprehensive semiconductor research and development program that will include research funding, prototyping capabilities, an investment fund, and workforce development programs. The Industrial Advisory Committee is helping to think through gaps and grand challenges that will excite and stimulate R&D across the U.S. through this entity.
We anticipate the creation of an independent entity with NSTC leadership reporting to a governing board informed and advised by industry, academia, government, and key stakeholders.
We are currently searching for a CEO for the entity that will operate National Semiconductor Technology Center (NSTC). We will publish an NSTC white paper by the end of this quarter that will provide guidance on the design and process for standing up the NSTC.
Advanced packaging is the current state of the art, but the U.S. has little to no capacity for advanced packaging at present. It is cost prohibitive to bring conventional packaging back to the U.S. — but we have an opportunity to skip ahead to advanced packaging capabilities as they are developing worldwide.
If we do not develop the expertise and capabilities for advanced packaging, the U.S. will cede leadership in semiconductor design and manufacturing to other countries.
The National Advanced Packaging Manufacturing program is also a multi-billion dollar program as designated in the law. The NSTC and Manufacturing USA will work closely together with the NAPMP and we anticipate a single point of entry for many programs. We also anticipate that the NSTC will operate pilot facilities associated with the advanced packaging program.
Some likely areas of focus for this funding based on input from the community include: co-design and simulation, chiplets, a pilot packaging plant, tooling and automation, and research on materials and substrates.
The NIST Metrology R&D program will be a several hundred million dollar program to fund NIST research and development in advanced measurement science and metrology tools. However, we almost always do our cutting-edge research in partnership and will be seeking academic and industrial partners for this work as well as we do in most areas (a good example of how we partner with academia includes the JQI and JILA).
NIST has been working with the semiconductor industry since its inception and will push forward new measurement capabilities in this program working closely with industry. In fact NIST has been doing research since the earliest research in semiconductors in the1940s — so I like to say that we have been preparing for the CHIPS Act for 80 years.
Research will include measurement science and characterization technologies to enable the development of advanced nodes, three-dimensional devices, and other leading-edge technologies.
The CHIPS for America R&D program will also leverage the Manufacturing USA model to help bridge the gap from research to commercialization. Manufacturing USA is a network of regional institutes that convene businesses, academia, and other stakeholders to test applications of new technology, create new products, reduce cost and risk, and enable the manufacturing workforce with the skills of the future.
Currently, 16 institutes serve a variety of sectors, from biopharma and biomanufacturing, to composites, to digital manufacturing and robotics, to energy, sensors, and flexible electronics.
In this several hundred million dollar program, NIST will establish one, and up to three, new institutes focused on semiconductors. Eight of these current institutes intersect with the semiconductor industry and we are discussing ways to fund coordinated projects and programs across the relevant partners in the network.
So how does all this programming and collaboration come together in the real world? Let’s just take a look at the integration of the NAPMP packaging program and the NSTC.
We envision the NSTC to be the centerpiece of the program — an independent operator managing multiple sites and assets with unique capabilities for prototyping and research. We also envision that the NSTC will run key parts of the packaging program — the packaging pilot plant and chiplets program. We envision that the packaging program will also separately invest in research in materials and substrates and new tool design and new metrology. But in the creation of IP in the chiplet area or in packaging in general, we would like to make this IP accessible to partners across the CHIPS R&D program.
Let me give you a hypothetical. Imagine that a large automotive company — a member of the NSTC — is building a 3D platform for autonomous driving. The project is highly aligned with NSTC capabilities, so NSTC provides most of the support.
The company would move faster with a proven 3D platform from a prior Department of Defense Commons project, some technology from the NAPMP chiplet library, and access to NAPMP advanced packaging processes. In this hypothetical, NSTC would coordinate access to these technologies.
After prototyping to a high technology readiness level, the technology enters a domestic foundry for high-volume manufacturing as a commercial technology. The technology is now also available to inspire new ideas for both the commercial and defense sectors.
The main takeaway is that by coordination and sharing of resources, programs across the U.S. government can greatly expand the amount of technology, expertise, and capacity available to developers. These factors will increase the chance of success of a new technology, and help reduce the cost and time to market.
This is just one example of how CHIPS for America will make a difference.
If we get this right, and we plan to, both the incentives and R&D programs will be transformational for this country. This big bet will pay us back with a bedrock of technological leadership that results in stronger economic and national security for years to come.
There is room for everyone to participate, and for all of us to benefit, and so we are asking for your partnership.
We have laid out lofty goals:
R&D has positions posting on Monday, and look for them at USAJOBS. They will also be posted on CHIPS.gov.
NIST and the Department of Commerce are excited by this challenge, and are already hard at work spurred on by our mission to promote U.S. innovation and industrial competitiveness. It is a mission that could not be more important in light of today’s very complex global economy.