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Raimondo outlines chips "space race"

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Feb 26, 2024
Illustration of a US flag made of semiconductor chips.

Illustration: Shoshana Gordon/Axios

Most companies requesting chips funding won't get it, Commerce Secretary Gina Raimondo said Monday.

Why it matters: The U.S. is competing with China to lead in the advancement and production of semiconductors, the hardware that powers nearly all technology, including artificial intelligence.

  • At a CSIS event, Raimondo said the "global technology race in the semiconductor industry" is akin to the "space race" and will require bold action.
  • "You can't lead in AI if you don't lead in making leading-edge chips, and so our work in implementing the CHIPS Act just got a whole lot more important."

What we're watching: Raimondo said investments in leading-edge logic chip manufacturing will put the U.S. on track to produce 20% of the world's leading-edge logic chips by the end of the decade. Today, the country is at zero.

  • These are the chips that matter for AI and quantum computing.
  • Raimondo: "We're going to make building hardware sexy again. How about that? Doesn't that sound fun?"

Yes, but: It will have to be done on a budget.

  • More than 600 statements of interest from companies have flooded the CHIPS Program Office.
  • Raimondo: "The brutal reality is a significant majority of those companies expressing interest aren't going to receive funding."

State of play: Commerce plans to invest about $28 billion of the $39 billion in incentives from the CHIPS and Science Act in leading-edge chip manufacturing.

  • But these companies have requested more than $70 billion.
  • The CHIPS Act also includes $2 billion in investments for legacy chips.
  • Raimondo said they think of that number as a floor and will "certainly exceed the $2 billion in statute."

Raimondo said she's spoken with a number of the key senators involved in the CHIPS Act in the last month — Sens. John Cornyn, Mark Warner, Todd Young and Senate Majority Leader Chuck Schumer — and they're all still strongly supportive.

  • "I have no doubt that when we say no to good companies, I'm going to get calls from senators saying 'How come you didn't fund that company?' And those will be uncomfortable calls."
  • "You know, there's an easy solution to this, CHIPS 2 — double it, I can double the number of companies, that'd be great. But with the limited money I have to hit these national security goals, we have to make tough choices."

What's next: Commerce is prioritizing projects that will be operational by 2030.

  • Raimondo also flagged the plan to launch a Workforce Center of Excellence at the new National Center for the Advancement of Semiconductor Technology, or Natcast, to "set standards and best practices to unify this industry."
  • Raimondo said a CHIPS Act 2 with more money may be needed in the future.
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