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. This program attracted top scientific talent from across the world and helped the Allies win the war. But it also built new scientific facilities across the nation to lead in nuclear and energy research for decades to come. The program funded first in 1942 cost an estimated $367 billion in today’s dollars.
Almost 20 years later, in 1961, 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 ensure 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, the Human Genome Project launched in 1990 under President Bush’s term. This big bet was funded from 1990-2003 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 markers that resulted 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, 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?
The U.S. is currently facing many threats despite our long-standing 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, and 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 the fact that we could not get enough semiconductor chips to power our industries — chips for automobiles, for critical medical devices, for critical infrastructure ... and everything that relies on chips, which is about everything from the simplest devices we rely on to the most complex.
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 — sometimes very specialized chips to support AI, biotech and the emerging quantum economy.
Recognizing these challenges, industry and government representatives came together with a focus on addressing challenges related to this shortage. These discussions led to the CHIPS and Science Act, signed into law by President Biden on Aug. 9, 2022.
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.
Workforce development cuts across all of these programs to ensure that there are highly skilled workers to fill the jobs we intend to create here in the U.S.
The act also funds programs at the Departments of Defense and State, the National Science Foundation, and other agencies. Achieving these goals is a whole-of-government effort, and Commerce has been working closely with our partner agencies.
CHIPS for America has just celebrated its first birthday, so let’s look at some of the program’s significant milestones.
Under the $39 billion program for manufacturing incentives, we have outlined several different funding opportunities.
The first funding opportunity is geared toward chipmakers —specifically commercial leading edge, current and mature node, and back-end fabrication facilities — and larger supply chain projects over $300 million in capital investments. Applications are being accepted on a rolling basis.
The second funding opportunity is for the construction, expansion or modernization of commercial facilities for semiconductor materials and manufacturing equipment at or over $300 million.
Responses to the first funding opportunity helped us recognize that major fabrication facilities need the support of dozens of suppliers. This opportunity and one to follow for smaller projects will jump-start the formation of domestic clusters of manufacturers and their suppliers.
Potential applicants for the supply chain opportunity may submit pre-applications on a rolling basis beginning on September 1 and full applications beginning on October 1.
All companies — no matter which NOFO is best suited for them — are invited to file a statement of interest to let us know their interests in CHIPS funding.
We have already received more than 460 statements of interest, and we want to hear from you, too. This will help to inform and prepare CHIPS for America for future programming.
We have released two vision papers outlining our strategic objectives.
As most of you have probably seen by now, we released a Vision for Success where we laid out four key targets that we believe we must meet by the end of the decade.
A couple of examples of what we are looking to accomplish are:
For the supply chain funding opportunity, we aim to work with industry, U.S. partners and allies, U.S. government agencies, state and local entities, labor unions, workforce development organizations, career and technical education providers, economic development organizations, and institutions of higher education to achieve three goals by the end of this decade:
We believe that targeted investments to realize these strategic objectives will address the greatest vulnerabilities and capitalize on existing U.S. strengths in this critically important supply chain.
Big bets like CHIPS require the best and brightest talent that reflects the ingenuity and diversity of America. We hired the first CHIPS staffer in September 2022. The team has now grown to more than 140 people from both inside and outside of the government.
The team includes:
Many of these people were motivated to come out of retirement or join the government specifically because they believe so strongly in the CHIPS mission.
Our strategy for implementing CHIPS has been informed by — and will continue to be informed by — extensive engagement with semiconductor industry leaders and experts in academia; nonprofits; local, state and federal government; public-private entities; national security entities; labor leaders; and international partners and allies.
The CHIPS Research and Development Office is establishing world-leading technical organizations that will provide the sector with widespread access to cutting-edge capabilities.
You will hear much more about these activities from R&D Director Lora Weiss in a moment. But the work done to date to deserves a spotlight among our milestones list. We have been working to stand up not just one, but four unique entities to serve the needs of the semiconductor industry, each with a workforce component. So we have achieved milestones in building leadership teams and strategies for these organizations, with more milestones to come.
I’ve talked about where we have been. Let’s look at where CHIPS is going.
Later this year, we will release a funding announcement focused on projects under $300 million for material suppliers and equipment manufacturers. This will continue to build out the domestic supply chain.
Also later this year, Commerce will announce a funding opportunity to support the construction of semiconductor R&D facilities. This funding opportunity is meant to complement the CHIPS R&D programs I just mentioned. It is for commercial entities — manufacturers and others in the supply chain. Academic and training organizations will have the opportunity to participate in programs and funding opportunities through CHIPS R&D, or they can seek a commercial partner for this final opportunity from the CHIPS incentives program.
In presentations like this, we talk about the incentives side of CHIPS, and the R&D side of CHIPS. Today, I want to leave you with a cohesive vision of CHIPS for America, which I think can be described as a series of virtuous cycles.
In this vision, CHIPS incentives do not replace private capital, but spur private investment in large-scale U.S.-based production and R&D, as well as throughout the supply chain. Both existing and new private investors are attracted to the U.S. semiconductor ecosystem and bring innovative approaches to funding industry growth.
We are already seeing this happen. Chipmakers have committed to more than $200 billion dollars of investments in facilities on American soil, and those investments began well before the current CHIPS funding opportunities opened.
Just as CHIPS for America has led to companies committing to make products on our shores, CHIPS has already catalyzed significant new activity across the country to grow and sustain a skilled and diverse semiconductor workforce.
Since the passage of the CHIPS Act in August 2022, at least 50 community colleges across 17 states have announced new or expanded programming to support opportunities in the semiconductor industry.
U.S. students are demonstrating increasing interest in the growing semiconductor roles. Data from the job platform Handshake shows that student applications to full-time jobs posted by semiconductor companies were up 79% in 2022-2023, compared to just 19% for other industries. Applications from core tech majors — the talent pool this industry most needs to fill expected skills shortages — increased by 168%. Internship applications followed a similar trend.
In another virtuous cycle, we intend for the recipients of CHIPS incentives to participate in the NSTC. The NSTC and other organizations we are building in CHIPS R&D will be informed by the needs of incentives recipients. The technical advances made by CHIPS R&D will help to ensure the success of CHIPS incentives recipients — and make the entire U.S. semiconductor sector more competitive.
I mentioned that this is a whole-of-government effort. It is also a whole-sector effort. To achieve this bold vision, we need your involvement.
CHIPS was established with the recognition that no single organization can establish a unified, vibrant semiconductor manufacturing and R&D ecosystem in America, including a resilient supply chain.
We have already benefited from your insight and expertise, and we are grateful for the time and candor that you have shared with us. Moving forward, I hope you will:
Thank you. We look forward to partnering with you.