3 key takeaways from POLITICO’s CHIPS Update

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The Commerce Department has received more than 530 statements of interest from 42 states for CHIPS funding, Adrienne Elrod, the government affairs director in the department’s CHIPS Program Office said Tuesday.

Speaking at POLITICO’s CHIPS Update in Washington, D.C., Elrod also said the Commerce Department has received more than 130 applications and pre-applications for funding.

But industry experts and academics warn that meeting production goals is at risk unless the U.S. addresses critical workforce shortages.

Here are three key takeaways from today’s event:

1. Applications for subsidies pour in

When asked about the hallmarks of a strong application for subsidies, Elrod said the most important criteria are national and economic security, as well as commercial viability. “We’re not replacing private capital,” she said. “We are doing this to further incentivize the plans that these companies have.”

The flood of interest has not been tempered by the Commerce Department’s labor requirements for applicants asking for more than $150 million in funding, Elrod said. These include providing affordable and accessible child care for workers.

The department has yet to distribute any funds, she said, but added there is a “staggered but very methodical and strategic approach in terms of how we’re releasing the funds,” and that funds will be distributed soon.

2. Immigration reform ‘a self-inflicted wound’

Another key to boosting U.S. semiconductor production is hiring qualified workers, which is throttled by immigration policy, said David Isaacs, vice president of government affairs at the Semiconductor Industry Association.

“We are imposing a self-inflicted wound on our country and this industry without high-skilled immigration reform,” Isaacs said.

A July report from SIA projected that the U.S. chips industry will grow by 33 percent by 2030, but that an estimated 58 percent of those 460,000 new jobs will go unfilled.

And with chaos erupting in the House, it’s unlikely Congress will address immigration any time soon.

3. U.S. STEM education lags behind

The biggest gap in the government’s ambitions to boost the domestic chips industry lies in a shortfall in U.S. training, according to experts on STEM education.

“The time frame is short; 2025 is considered to be when shortfalls are going to happen,” said Michael Spencer, a professor in Morgan State University’s Department of Electrical and Computer Engineering.

A critical element of that gap is excitement, as well as outreach to underserved communities. Shari Liss, executive director of the nonprofit SEMI Foundation, called for a national workforce strategy to boost the STEM education pipeline, including apprenticeships and internships.

“[Students] want to work for companies where they feel like they belong, so we have to look at the diversity element,” Liss said. “We as an industry have to look at alternative pathways to hiring.”

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