"There's no free lunch" - experts weigh in on Biden's $52 billion bid to spur US chipmaking
The Biden administration on Tuesday said it will require companies winning funds from its $52-billion US semiconductor manufacturing and research program to share excess profits and explain how they plan to provide affordable childcare.
The Commerce Department on Tuesday released its plans to begin accepting applications in late June for a $39-billion manufacturing subsidy program. The CHIPS Act plays a central role in the Biden administration's effort to bring semiconductor manufacturing back to the United States. Its success is vital to US ambitions to keep ahead of China in global markets.
Recipients who receive more than $150 million in direct funding "will be required to share with the US government a portion of any cash flows or returns that exceed the applicant’s projections by an agreed-upon threshold," the department said.
"You know, there's no free lunch," said Sarah Kreps, a professor of government affairs at Cornell University and the director of the school's tech policy institute. "And I think that's the point of the United States government, which is if you, if we're giving you billions of dollars, we're going to shape or we'll want to shape how you're using those funds."
Commerce Secretary Gina Raimondo said companies must also submit a plan that includes an outline of workforce needs. Applicants seeking more than $150 million in direct funding must submit "a plan for how they will provide affordable and accessible childcare for their workers."
"It's a little bit unusual," says Emily Kilcrease, a senior fellow at the Center for a New American Security. "But [it's] also not that surprising from the Biden administration, which has made a priority for, you know, increasing access to childcare has been part of its social care infrastructure program. But what's unique is that they're explicitly linking it into these incentives and subsidy programs. I think it's also a recognition, though, that they are really trying to address some of the workforce constraints that we know exist in the chip sector."
The Semiconductor Industry Association said it was carefully reviewing the funding notice that "lays out the rules of the road for companies to apply for the CHIPS Act’s manufacturing grants."
Reuters
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