Digest

This episode of Business Breakdowns features a conversation with Todd Fisher, CIO of the Chips Act Office, delving into the Chips Act's progress and impact on the US semiconductor industry. Fisher highlights the Act's $50 billion investment, with $39 billion dedicated to manufacturing incentives and $11 billion for R&D. He emphasizes the importance of attracting both US and foreign companies to invest in the US ecosystem, including supply chains, R&D, and workforce development. Fisher discusses the challenges of building sustainable, onshore projects, including workforce development, infrastructure, and the need for customer commitment. He emphasizes the program's focus on attracting leading-edge fabrication and the importance of building a resilient supply chain. Fisher also addresses the program's unique approach, emphasizing the importance of a strong team, iterative engagement with industry, and a focus on long-term success. He acknowledges the challenges of workforce development but highlights the program's efforts to build a talent pipeline and support local initiatives. Fisher concludes by discussing the program's milestones and the importance of measuring success over the next five to ten years, aiming to see a significant shift in the US semiconductor manufacturing landscape.

Outlines

00:00:00

Announcement: Colossus Event

This Chapter announces a multi-day event in September co-hosted by the speaker and David Cendra, focusing on business breakdowns and founder collaboration. The event is tailored for the investment community and aims to foster relationships in a private location with limited main stage talks and more breakouts, panels, and one-on-one conversations. Details can be found in the show notes or at Colossus.com/events.

00:03:19

Chips Act: Boosting US Semiconductor Manufacturing

This Chapter dives into the Chips Act, a 2022 Congressional initiative aimed at bolstering US semiconductor manufacturing capabilities to compete with East Asia. The Act addresses the reliance on foreign supply chains, which led to shortages during the pandemic, impacting critical resources and defense systems. The Chips Act provides $53 billion in subsidies, tax credits, and research funding for US companies, aiming to build leading-edge logic and memory fabrication, advanced packaging facilities, and capacity for current generation semiconductors. The guest, Todd Fisher, CIO of the Chips Act Office, discusses the program's progress and challenges.

Keywords

Q&A

• What are the key goals of the Chips Act?

  The Chips Act aims to boost US semiconductor manufacturing capabilities, reduce reliance on foreign supply chains, enhance national security, and promote economic growth. It provides billions of dollars in subsidies, tax credits, and funding for research and development to incentivize companies to build and expand semiconductor production facilities in the United States.

• How does the Chips Act address the fragility of the US semiconductor supply chain?

  The Act provides incentives for companies to build and expand semiconductor production facilities in the United States, reducing reliance on foreign supply chains. It also aims to foster a more resilient domestic ecosystem by supporting research and development, workforce development, and the establishment of a robust supplier network.

• What are the challenges of building sustainable, onshore semiconductor manufacturing projects?

  Challenges include workforce development, infrastructure, and the need for customer commitment. The industry requires a highly skilled workforce, and the US needs to invest in training and education to meet the demand. Infrastructure requirements, such as power, water, and cleanroom facilities, can be significant. Additionally, companies need to secure long-term customer commitments to ensure the viability of these projects.

• How does the Chips Act program differ from traditional government funding programs?

  The program emphasizes a strong team with expertise in investment, finance, and industry, iterative engagement with industry, and a focus on long-term success. It also involves a more active role in supporting companies with workforce development, infrastructure, and environmental challenges.

• What are the key metrics for measuring the success of the Chips Act program?

  Success will be measured over the next five to ten years by the shift in US semiconductor manufacturing capacity, the development of a robust domestic ecosystem, and the ability to attract leading-edge fabrication. The program aims to see a significant increase in US semiconductor production, a thriving supplier network, and a skilled workforce.

• How does the Chips Act program address the potential for oversupply in the semiconductor market?

  The program is designed to be a part of a broader set of government and market tools to ensure a balanced approach. It encourages customers to invest in supply chain resilience and diversification, recognizing the importance of having multiple sources of supply. The program also monitors global market trends and adjusts its strategies accordingly.

• What is the role of workforce development in the success of the Chips Act program?

  Workforce development is critical for attracting and retaining skilled workers in the semiconductor industry. The program supports initiatives to build a talent pipeline, train workers, and create pathways for individuals to enter the industry. It recognizes that a skilled workforce is essential for the long-term success of the US semiconductor industry.

• How does the Chips Act program address the potential impact of the upcoming election?

  The program is considered to be bipartisan and has gained even more support in light of recent geopolitical developments and the rise of artificial intelligence. The program's focus on economic and national security is seen as a priority across the political spectrum.

Show Notes