The CHIPS Act and a Long-term Vision for America's Technological Leadership

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Feb. 24, 2023
By: Marvin E. McPherson

In a Feb. 23, 2023 speech at the Georgetown School of Foreign Service, Department of Commerce Secretary Gina Raimondo announced several goals to be achieved by 2030 related to the United States’ role in the global chip industry.

First, she indicated that the United States would have at least two large scale clusters of chip production, including suppliers and R&D facilities. These clusters would receive support from the CHIPs Act.

Second, she indicated that the United States would invest in high-volume advanced packaging facilities, with the goal of becoming a world leader in packaging technologies.

Third, she indicated that the U.S. production would produce both advanced and more mature chips on economically competitive terms.

The long-term rationale for these goals is to ensure “[the United States] makes the chips that we need on our shores, so that we have the technological authority to lead the world.” This goal was compared to the United States investments in food security through the land-grant university program, nuclear technology, and the space race, each of which yielded economic benefits to the country as a whole.

Along with these domestic goals, it is also clear that the United States will need to continue to seek consensus with allies regarding export controls. This is intended to prevent dual use items, chips in particular, from reaching the undesired hands, but can also economically burden allies who sell those materials. Thus, export regulation will continue in these areas.

Exporters and semiconductor manufactures should take away at least three things from Secretary Raimondo’s speech. First, Commerce will continue to increase the control of semiconductors with an emphasis in creating chips in the U.S, so that more high-powered chips fall unambiguously within Commerce’s control scope.

Second, Commerce will continue to prioritize working in concert with allied countries to implement current and new controls on semiconductors. This may slow U.S. rule making, but will likely lead to greater global uniformity in controls.

Third, Commerce will likely increase its use of “is informed” letters in order to implement licensing requirements for companies producing new chips not yet controlled. This process allows Commerce to bypass lengthy rule-writing processes to put controls in place quickly.

Companies should ensure that they are actively involved and up to date on the ever-changing landscape of semiconductor controls. As noted in a prior article, Commerce has promulgated the rules and now have more funding to protect its technological advantage.

If you or your company needs help classifying current semiconductor chips or would like assistance submitting further comments on this area of regulation, please reach out to the attorneys at Barnes, Richardson, and Colburn.