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August 01, 2022

It's nice to once again be writing Login from the comfort of my own bed. Today's newsletter is 1,141 words, or a 4-minute read.

1 big thing: Chip billions won't be a quick fix

An illustration of a stack of $100 bills that also resemble semiconductors
Illustration: Sarah Grillo/Axios

The billions in funding for chips and research Congress approved last week will take years to put a dent in the problems the funding targets, Axios' Margaret Harding McGill reports.

Why it matters: The new Chips and Science Act's investments aim to ensure U.S. leadership in critical technologies and industries — especially producing the computer chips that power so many other products today. But those benefits won't show up fast for consumers having trouble finding the car they want or small businesses that need parts.

Catch up quick: The Chips and Science Act provides $52.7 billion in funding for the semiconductor industry and about $200 billion for scientific research.

What's happening: The semiconductor manufacturing facilities — known as fabs — that the funding will subsidize can take three to five years to build because of their complexity.

  • That means the earliest the government-supported chips will be available is likely 2025, although some companies may move more quickly because they've had plans in the works ahead of the funding.

What they're saying: Chipmakers say they need government support to level the playing field for the U.S., arguing that other countries already subsidize the industry.

  • Intel has said the scope and pace of its $20 billion plant site in Ohio depends on the federal funding, and the company could ultimately invest $100 billion in the state.
  • Intel vice president of government relations Al Thompson told Axios he expects construction to start on the Ohio site this year, and noted the company is also investing in plants in Arizona and New Mexico.

Micron also announced its intent to bring leading-edge memory manufacturing to the U.S. after Congress passed the bill, and other semiconductor companies promised expansions of their own.

  • Micron senior vice president and general counsel Rob Beard told Axios the company is considering several sites in the U.S. for a major facility.
  • Beard said that without the new subsidies, building in the U.S. as opposed to Asia is "30 to 50% more expensive... because those other countries already do what the Chips Act does."

The big picture: Rather than solving short-term problems, the U.S. government funding invites companies to invest on American soil and avert future supply-chain snafus the next time a crisis hits.

  • Other countries have incentivized semiconductor manufacturing in a way the U.S. has not, and "and as a result, we have slipped dramatically," John Neuffer, CEO of the Semiconductor Industry Association, told Axios.
  • Advanced manufacturing facilities can cost $10 billion to $30 billion to build. The subsidies from the government provide "a little bit of seed funding" to incentivize construction, Rob Strayer, executive vice president of policy for tech trade group ITI, told Axios.

Meanwhile, the scientific research funding includes $81 billion authorized for the National Science Foundation, but it’s not clear when that money could be appropriated, and it will take another act of Congress before cash flows to the scientific investments the law promises.

  • Earlier this year, NSF created a new Directorate for Technology, Innovation and Partnerships with a goal of helping to translate NSF-funded research into commercial products, but NSF director Sethuraman Panchanathan tells Axios the directorate needs the funding from Congress to fully realize its potential.
  • He pointed to NSF-funded research from the early 2000s that eventually led to the formation of biotech firm Gingko Bioworks in 2008, which NSF also invested in. The company went public last fall after a $15 billion special purpose acquisition company, or SPAC, merger.
  • "When we're talking about this investment authorization, what we're doing is we are speeding up and scaling the level of these activities, both on the curiosity-driven research side, as well as the user-inspired innovation side," Panchanathan told Axios.

Yes, but: While the chip funding bill was held up in Congress for more than a year, China's main chipmaker apparently figured out how to produce smaller-scale semiconductors rivaling those made in Taiwan, according to a New York Times report.

2. Klobuchar: Antitrust bill will have to wait

Photo of Sen. Amy Klobuchar's face with her lips pursed
Photo: Anna Moneymaker/Getty Images

The Senate's most-likely-to-succeed tech antitrust bill, the American Innovation and Choice Online Act, won't get a vote before the Senate heads into August recess, the bill's leading Democratic sponsor, Sen. Amy Klobuchar, said Saturday, Axios' Ashley Gold reports.

The big picture: Klobuchar and other supporters have said a summer vote on the bill was essential, because passing bipartisan legislation gets harder as midterm elections approach. Now they'll have to try to push their proposal forward in the fall.

Driving the news: Senate Majority Leader Chuck Schumer (D-N.Y.) previously told Klobuchar he aimed to hold a floor vote for her bill this summer.

  • But other Senate priorities like gun control, climate, energy and infrastructure funding and the Chips and Science Act have taken up the limited floor time.

Why it matters: The bill would bar Big Tech companies from prioritizing their own services over those of rivals.

  • Firms like Apple, Google, Meta and Amazon have lobbied hard against the bill, saying it would ruin customers' favorite security and convenience features.
  • The bill's supporters say it would loosen the grip of the largest tech companies' control of the digital ecosystem and enhance competition.

What they're saying: During a Saturday appearance on Symone Sanders' MSNBC show, Klobuchar said that Thursday she and Schumer "talked about having this vote in the fall. We're not going to be able to do it this week, obviously, with the major vote we're having on the Inflation Reduction Act."

3. Quick takes: More info for Uber drivers

1. Uber said Friday that it will give more of its drivers information on how much they will earn before they have to decide whether to accept a ride.

  • Why it matters: The company has tried to improve its support for drivers in the face of increased competition for gig workers and criticism that it exploits its workers.

2. Elon Musk countersued Twitter in Delaware Chancery Court on Friday, as CNBC reports.

  • The intrigue: Musk filed the court documents under seal, so we still don't know exactly what he is alleging.

3. The human beings behind the multibillion-dollar virtual influencer industry in China and Japan are stepping out from behind their avatars to complain about working conditions, as Rest of World reports.

  • Go deeper: Shows featuring these digitally enhanced online personalities depend on actual humans in motion-capture suits. Fans want more and more from their idols without realizing that these actors need time off.

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