The Pentagon will be the first to see the fruits of the $53 billion semiconductor manufacturing "CHIPS Act" signed by President Joe Biden in August, U.S. Commerce Secretary Gina Raimondo told the The Wall Street Journal on Tuesday.
Calling the current situation in which the U.S. military depends on Taiwan for producing about 90% of the semiconductor chips needed for its equipment "untenable" and a "national security vulnerability," Raimondo said the new law will ensure the Pentagon gets the chips it needs.
"Every single piece of sophisticated military equipment, every drone, every satellite, relies on semiconductor chips," she told the Journal.
Raimondo outlined how her agency will implement the new law to "unlock" private capital with a small amount of public funds to innovate and return advanced chip manufacturing to the United States.
"Today, because of President Biden's leadership, working with Congress, the CHIPS and Science Act presents us with an opportunity to make investments that are similarly consequential for our nation's future," Raimondo said during a speech Feb. 24. "But only if we, as a nation, unite behind a shared objective, generate a similar public-private mobilization and think boldly."
The new law allocates $39 billion in incentives for companies to build and expand manufacturing operations in the U.S., decreasing dependency on imported chips.
"I want the United States to be the only country in the world where every company capable of producing leading-edge chips will have a significant R&D and high-volume manufacturing presence," Raimondo said. "I am here to issue a call to the private sector to get in the boat and row with us. We must produce chips right here in America. It is America's obligation to lead. We must push like no time before."
Applications and guidelines for companies taking advantage of the new law will be available this week as the first round of funding looks to bring back manufacturing plants to the U.S., with funding for semiconductor materials and equipment facilities coming later in the spring, and research and development facilities in the fall, according to the agency.
Raimondo noted the importance of having a trained workforce for the "hundreds of thousands of good jobs" the act is expected to create.
"If we don't invest in America's manufacturing workforce, it doesn't matter how much we spend," she said. "We will not succeed. If we get this right, the U.S. semiconductor workforce will be the gold standard for other industries to follow."
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