CHIPS bill gets praise -- and a ding

The U.S. Senate advanced CHIPS Act legislation by 64-34 on Tuesday, winning kudos from most top leaders in the semiconductor industry but criticism from a few innovators.

Edge Q CEO Vinay Ravuri said the $52 billion package, which includes grants for domestic manufacturing, falls short by not funding chip designers in addition to chip manufacturers.  The company makes a 5G wireless base station-on-a-chip and innovates in AI based on open RISC-V.

He called the current measure, expected to pass the Senate next week and later the House, “a necessary first step to help restore and secure U.S. leadership and ingenuity in the semiconductor sector."

However, he added in a statement: “The CHIPS Act addresses a scaling issue. But it does not address ingenuity. To remain relevant, we need to invest in cutting-edge companies…We need to ensure that funding programs advantage not only major chip manufacturers, but also chip designers and startups alike.”

The Semiconductor Industry Association hailed the preliminary vote and joined several government affairs executives from major chip companies in a virtual panel conducted by CQ Roll Call on Thursday. They included representatives from Intel, Samsung, TSMC, Micron and Global Foundries.  All the executives urged final passage of the measure to ensure U.S. competitiveness in chip manufacturing and R&D, noting the U.S. share of all chips produced globally has fallen to 12% from 37% in 1990.

Micron has committed a $150 billion investment over 10 years into production of memory and storage chips, a segment that makes up 30% of all semiconductors. The U.S. currently does not produce any leading-edge DRAM products and provides only 2% of the global memory supply, said Courtney Geduldig, corporate vice president of global public affairs for Micron.

A large memory fab might take up 1 million square feet in several buildings that would cost up to $50 billion.  “That can’t happen without sustained support,” she said, making an argument in favor of the 25% investment tax credit that is part of the legislation.

The package that won an initial nod by the Senate on Tuesday goes well beyond the $52 billion for chip manufacturing support. The other provisions were described in a 1,055 page bill that Senate Majority Leader Chuck Schumer, D-NY, presented to senators earlier on Tuesday.

These other authorizations include billions in funds in coming years for the National Science Foundation, National Institute of Standards and Technology and Department of Energy. There are even provisions to set up a Moon to Mars Program, including Artemis missions, and other NASA.

A major focus of the NSF, NIST and DOE funding includes millions of dollars in support of STEM education.  Also supported are regional technology hubs, perhaps a dozen in all to be located in the Midwest and other areas outside of Silcon Valley and other traditional tech meccas. The concept that has been studied for three years and is backed by the TechNet, a trade association.

“We’re fully behind the bill and are the biggest proponent of the ability to innovate and get ahead of emerging technology and competition from China,” said Linda Moore, CEO of TechNet, in an interview.  “This has felt like a no-brainer.”

Moore said she was relieved the Senate left provisions to help promote the STEM pipeline of students who later become skilled workers needed to fill jobs at several planned chip fabs.  “We produce far, far fewer STEM students than China and it’s not even close,” she said.

Other countries promote immigration policies that attract students from abroad to study STEM, a policy   TechNet hopes to see imitated in the U.S. There are no immigration policies related to STEM in the CHIPS bill.

RELATED: CHIPS Act passes U.S. Senate in 64-34 preliminary vote