Biden delivers speech at Carlsbad’s Viasat, points to CHIPS law
President Joe Biden wrapped up a campaign trail in San Diego County on Friday at satellite internet provider Viasat – touting his administration’s work to further boost U.S. semiconductor manufacturing
In a low-key and mostly nonpartisan speech to Viasat employees and local Democratic lawmakers, Biden focused on his administration’s economic achievements, particularly the $52 billion CHIPS and Science Act that garnered bipartisan support for the Congress.
Biden spent Thursday and Friday in California campaigning for U.S. Representative Mike Levin, who is locked in an increasingly tight race with Republican Brian Maryott for California’s 49.e District headquarters as voters worry about inflation and the direction of the economy.
The president told Viasat of Carlsbad because about 10% of the company’s 7,000 employees are veterans. Viasat is also headquartered in the 49th arrondissement and provides in-flight satellite Internet access to Air Force One and other government VIP aircraft.
The CHIPS and Science Act channels $39 billion in subsidies to semiconductor manufacturing in the United States, as well as a 25% investment tax credit on capital expenditures.
The legislation also earmarks $13.2 billion for technology research and workforce development.
Biden said the legislation “will energize our efforts to manufacture semiconductors here in America. It has spurred a huge response in private sector investment across the country – more than ever before in such a short time. Hundreds of billions of dollars.
Micron, a memory chip maker, announced plans to invest $100 billion in new manufacturing capacity in upstate New York. Intel has opened a $20 billion chip factory near Columbus, Ohio. IBM announced a $20 billion investment in the development of artificial intelligence and quantum computing technology in New York’s Hudson River Valley. Global Foundries is also targeting more than $4 billion under the CHIPS Act to expand production, also at a New York plant.
American companies remain leaders in the design of complex semiconductors. Qualcomm of San Diego is the leading developer of mobile chips for smartphones. Nvidia develops high-speed graphics processors for video games. Apple has made inroads with high-performance central processors for computers and phones.
But these chip designers don’t manufacture, in part because building complex semiconductor fabs costs billions for the complex lithography and other equipment needed to deliver the most advanced chips.
Instead, chip designers outsource manufacturing to companies that specialize in making advanced processors, such as Taiwan Semiconductor Manufacturing Corp. (TSMC) and Samsung.
Today, the United States produces about 10% of the world’s semiconductor supply, up from 30% in the 1990s. Asian manufacturers now produce about 75%.
“It’s also a matter of national security,” Biden said. “Earlier this year I went to a Lockheed factory in Alabama where they make Javelin missiles. Guess what? They were having trouble getting the Javelin missiles to Ukraine because they didn’t have the chips. We we need semiconductors not only for these Javelins but also for other weapon systems that exist today and in the future.
Viasat designs semiconductors for several products, ranging from satellite internet equipment to National Security Agency-certified encryption devices for the U.S. government, said Craig Miller, head of the $1.1 billion government services arm. from Viasat.
It also outsources manufacturing. The expansion of the production supply chain in the United States provides the company with security and predictability, he said.
“Additionally, having a national capability allows us to work on special projects or classified programs that require a very secure semiconductor,” Miller said. “Not having to relocate it and have it made in America is really good for us and really good for the country.”
Semiconductor makers worldwide are expected to invest $150 billion in capital expenditure this year, said industry expert Handel Jones, founder and chief executive of International Business Strategies. So $39 billion over a few years in the CHIPS Act is a relatively small amount.
“But I think it’s a good start,” said Jones, who also praised the research money. “The negative that we also see is the significant political issues involved. California senators don’t seem engaged. Schumer is very active, so he makes quite a bit of money for New York.
Handel was referring to Senate Majority Leader Chuck Schumer, D-New York.
Handel added that Qualcomm of San Diego may be seeking research funding under the CHIPS Act for its work on 6G wireless communications, automotive artificial intelligence and image processing, among others.
“They’re doing some really innovative things right now in terms of new generations of technology,” he said.
A Qualcomm spokesperson said the company “applauds the cooperation and persistence in this legislation, which will help strengthen America’s supply chains and maintain its leadership in research and development – at the heart of growth, our country’s competitiveness and security”.
Biden said the CHIPS Act aims to address the research funding gap in the United States in recent years.
“Decades ago in the United States of America we used to invest in ourselves,” he said. “America has invested 2% of its gross domestic product in pure research and science. Over the years we have moved away from that. We invest 0.7% of our GDP in science and research.
“Does anyone here think the future doesn’t lie in major breakthroughs in technology and science?” He asked. “Other countries are quickly approaching. The CHIPS and Science Act puts us on the path to further progress.
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