Two years later, money from the CHIPS Act is moving

Two years into the nation’s most ambitious industrial policy in decades, the pieces needed to restore the U.S. as a leader in chip manufacturing and development are slowly falling into place.

Since President Joe Biden signed the CHIPS and Science Act into law in 2022, the nearly $53 billion investment in the country’s semiconductor industry has already funded 26 projects and created more than 36,000 jobs, with large companies such as Intel, Micron and IBM announcing new facilities in Arizona, New York and Oregon, among other states.

“This once in a generation investment by the U.S. government is not the end,” Masoud Agah, founder and CEO of the Virginia Alliance for Semiconductor Technology, which works to promote collaboration on chipmaking throughout the commonwealth, said Monday at the Quantum World Congress in Tysons, Virginia. “It's not the end, but the beginning of a journey.”

Indeed, now that more than half of the $52.7 billion allocated has been disbursed, the real work has begun. Speakers at the event, which focused on efforts like the CHIPS Act to revitalize future industries, identified some of the tasks before the government, including encouraging partnerships between the public and private sector and academia, and ensuring workers have the skills needed to fill these research and manufacturing jobs.

The CHIPS and Science Act is aimed at rebuilding the country’s semiconductor industry by bringing the research and development and manufacturing of chips back to the U.S. Since the law was passed, some of the world’s biggest chipmakers have promised to spend billions to build new manufacturing facilities and research and development. 

Those come with the additional promise of hundreds of jobs in local communities across the country, which are already positioning themselves as ecosystems for chip production and research.

To capture these investments, communities will need a way to ensure cooperation on a regional and even statewide basis. Agah, who delivered the keynote, said that since its founding in July 2023, the Virginia Alliance for Semiconductor Technology has brought together higher education institutions, industry, governments, nongovernmental organizations and economic development entities under one umbrella to push for more chipmaking in Virginia. 

The collaboration helped academia bring in more than 200 faculty, 2,500 students and 65,000 square feet of shared space for chip fabrication, packaging and other functions.

Agah called the alliance “the conductor of the semiconductor symphony in Virginia” and said other states need a similarly coordinated effort as a “mutually beneficial roadmap of cooperation will lead to a more robust and secure semiconductor ecosystem.”

Making states the powerhouses for semiconductor manufacturing and research also means readying a new generation for semiconductor-related jobs. Stephen Ezell, vice president for global innovation at the Information Technology and Innovation Foundation, said the U.S. will need around 67,000 more workers by 2030 to keep up with demand in the chipmaking sector.

To fill those roles, building a pipeline of potential employees as early as possible can help. But it will also need educational institutions and companies to embrace experiential, hands-on learning to help people pivot careers. Agah said the alliance helped develop non-degree certification in fabrication and manufacturing that provides 100 hours of education split between online learning and hands-on training.

Erwin Gianchandani, assistant director at the National Science Foundation’s Technology, Innovation and Partnerships directorate, called for building regional clusters and encouraging experiential learning, including in underserved areas, to “tap into the talent that exists in every corner of the nation.”

Investing in education in underrepresented communities is necessary, he said, “to maintain our global competitiveness going forward.”

Just look across the pond. Mungo Woodifield, a minister counselor at the British Embassy in Washington, D.C., said South Wales, once reliant on the declining coal mining industry, has become a hub for semiconductor activity through its CSconnected cluster, which brings together academia, manufacturing and other sectors to build chips.

CSconnected said in 2022 that 1,600 people were employed in the semiconductor field, with average pay levels in the sector around 60% above the Welsh average. The industry has also added almost 200 million pounds in gross value to the country’s economy. Woodifield said more than 12,500 people are now employed in the field in South Wales, while other clusters are forming throughout the United Kingdom.

“Supporting this innovation, we believe, is key not just to grow the UK economy at the macro level, but also for local communities,” he said.

The sense of optimism at the event was palpable, despite headlines this week about Intel’s mounting financial troubles. The Biden administration has bet big on the company, which is in line to get $20 billion under the law. Instead, speakers focused on the enormous federal investment in the industry, as well as in infrastructure and toward fighting climate change. Governments at all levels should be able to take advantage, speakers said.

“It’s just a wild time to be in government, to be honest,” said Heather Evans, deputy assistant secretary for manufacturing at the Department of Commerce’s International Trade Administration. “It’s an exciting time.”