CHIPS Act: Securing Semiconductor Supply - [Business Breakdowns, EP.167]

49 snips

May 31, 2024

In this enlightening discussion, Todd Fisher, the CIO of the CHIPS Act office with 30 years of finance experience, dives into the pivotal CHIPS Act. He clarifies how the $53 billion funding will reshape U.S. semiconductor manufacturing and reduce dependency on foreign suppliers. Todd tackles investor concerns about government intervention, the necessity for a resilient supply chain, and the collaborative efforts needed for long-term industry success. The conversation also touches on the strategic implications of upcoming elections on national security and semiconductor policy.

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INSIGHT

A Different Approach

The CHIPS Act program differs from traditional government programs with its proactive and iterative approach.
They focus on engaging with the industry and prioritizing strategic goals, not just applications.

INSIGHT

Workforce Development

Workforce development is crucial for CHIPS Act success, requiring diverse skill sets.
The program involves evaluating workforce plans, direct company support, and best practice sharing.

ADVICE

Overcoming Workforce Hurdles

Addressing workforce challenges requires consistent local engagement and diverse strategies.
Companies must invest and collaborate with educational institutions and local groups.

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We have a special episode today, breaking down the CHIPS Act. We've covered the semiconductor space in depth on Business Breakdowns, but in this conversation, we go broader. We discuss the CHIPS Act, enacted by Congress in 2022, which aimed at boosting the US's semiconductor manufacturing capabilities to better compete with East Asia.

America had been dependent on that foreign manufacturing which created massive shortages, having implications across some of our most important resources and defense systems. The CHIPS Act itself provides just under $53 billion in subsidies for US companies and the goal is to build out these capabilities with leading edge logic and memory fabrication, advanced packaging facilities, and advanced capacity for current generation semiconductors.

My guest today is Todd Fisher, CIO of the CHIPS Act office. We discuss some of the broader questions any investor might have about subsidized industry programs and how that will shift to the natural free market supply & demand dynamics that you would typically see in industries like semiconductors. It's truly a wide range of conversation and particularly timely with the recent funding announcements from the team. Please enjoy this breakdown of the CHIPS Act.

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Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:05:23) Current State of the Semiconductor Supply Chain

(00:08:50) Funding and Incentives Breakdown

(00:11:23) Sustainability and Long-term Viability of Projects

(00:15:54) Building Economic and National Security

(00:18:25) Massive Undertakings in Fab Construction

(00:20:49) Vision for Success and Leading Edge Fabrication

(00:29:54) Workforce Development and Environmental Considerations

(00:36:55) Future Milestones and Program Success Metrics

(00:44:00) TSMC Moving Capacity Into the USA

(00:48:43) The Effect of the Upcoming Election on the CHIPS Act