Raimondo testifies on the Hill on May 16. Photo: Eric Lee/Bloomberg via Getty Images
Commerce Secretary Gina Raimondo on Tuesday testified before the House Science Committee on the implementation of the CHIPS and Science Act.
Why it matters: The CHIPS and Science Act directs billions of dollars to make the U.S. the premier destination in the world for chip design, R&D, manufacturing and leading-edge packaging.
Catch up fast: Since the bill was signed into law last August, companies have announced $166 billion worth of investments in manufacturing chips, materials and equipment for chips and related research, according to Commerce.
- More than 500 companies have submitted statements of interest to participate in the program, Raimondo said during the hearing.
- On Sept. 1, Commerce began accepting applications for large supply chain projects worth $300 million or more.
- Raimondo has more than 140 people working on the new CHIPS for America team at Commerce, including national security leaders, economists, lawyers, researchers, workforce experts and finance professionals.
Yes, but: Republicans took issue with Raimondo's implementation guidelines, which they say will result in higher costs of doing business.
- Chair Frank Lucas, who didn't attend the hearing in person because he's recovering from surgery in Oklahoma, said in his opening remarks he's "concerned that the first call for funding proposals came with a number of stipulations that are clearly more about fulfilling a political agenda than they are about building our chips manufacturing capabilities."
- For example, requiring fabs to provide childcare and encouraging unionized workforces, which Lucas argues add time and expense to construction.
- "If we burden state and local governments and industry partners with regulatory requirements, long review timelines and unrelated paperwork, we risk wasting billions in taxpayer funding and weakening our competitive advantage over our adversaries," said Rep. Brian Babin, who sat in for Lucas.
The other side: "You can't hire the workers you need unless women can work and that's not going to happen unless there's childcare that's affordable," Raimondo said.
- "I'm not doing that because it's a social issue. It's a business issue."
What we're watching: Public and private sector officials promise CHIPS will infuse the U.S. with thousands of new jobs.
- "If you were to say to me what keeps you up at night, it's a long list, but the workforce is something that I worry about," Raimondo said.
- Industry needs 100,000 chip technicians right now and that number is going to rise to about 300,000 "pretty quickly," Raimondo said.
- Federal incentives in domestic chip manufacturing would create an average of nearly 200,000 American jobs annually as fabs are built and add nearly $25 billion annually to the U.S. economy, according to a Semiconductor Industry Association and Oxford Economics report.
- The government is banking on colleges and universities to partner with companies to triple the number of graduates in chip-related fields, tap into under-represented communities and train technicians through apprenticeships.
Separately, Raimondo said she'd like to work with Congress to come up with a plan to source critical rare earth minerals for chips outside of China if that country poses a national security concern "because we can't be held hostage."
What they're saying: Rep. Haley Stevens told Axios a "CHIPS 2.0" package that addresses not just rare earth mineral procurement but also permitting reform for domestic production and refinement "is alive and well" with her.
- "Unfortunately, due to failed Republican leadership, it's difficult for us to even do the basics of funding the government and averting shutdowns and defaulting on our debt and we can't focus on bigger picture items."
What's next: Commerce said in a recent memo it will announce funding opportunities for smaller supply chain projects and commercial R&D facilities.
- Raimondo said the National Semiconductor Technology Center is on track to launch this fall.
- Announcements for the Regional Technology and Innovation Hubs initiative and the Recompete Pilot Program — which Raimondo said have been "massively" popular among applicants — are also coming this fall.
- Recompete is a $200 million project to spur economic activity in communities across the country where employment significantly trails the national average.
- Commerce has gotten so much interest in the Recompete program that Congress should increase funding for it, Raimondo said.
