Consider This from NPR - Can America Win The Chips Manufacturing Race?

Episode Date: March 21, 2024

President Biden just awarded $8.5 billion dollars to the company Intel to help fund semiconductor factories in Arizona, Ohio, New Mexico, and Oregon. At a visit to Intel's campus outside Phoenix this week, Biden said the money will help semiconductor manufacturing make a comeback in the US after 40 years.The money for Intel comes from the CHIPS and Science Act, which was signed in 2022 to boost domestic semiconductor manufacturing. The administration's goal? For 20% of the world's leading-edge semiconductor chips to be made on American soil by 2030.The US currently makes zero of the world's leading-edge semiconductor chips. By 2030, the Biden administration wants to make a fifth of them. So how will America get there? For sponsor-free episodes of Consider This, sign up for Consider This+ via Apple Podcasts or at plus.npr.org. Email us at [e-mail] more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Welcome to GTC. I hope you realize this is not a concert. Jensen Wong took the stage this week in San Jose, California, at NVIDIA's conference dubbed AI Woodstock. You have arrived at a developer's conference. Wong is the co-founder and president of the AI chip company NVIDIA. Its technology powers things like

chat GPT and robots. Well, I think we have some special guests. NVIDIA has seen explosive growth in the last year. It's now worth more than Amazon, Meta, or Google's parent company, Alphabet. And it's leading the way on what could be America's AI and semiconductor renaissance. I am a visionary.

I am a transformer. I am AI. NVIDIA is transforming the chip market. But even though it's an American company that designs chips here, it sends its designs to be manufactured in Taiwan and other parts of Asia. Now, President Biden is trying to make sure Americans have a piece of that action. This week in Arizona, he announced his administration will award up to $8.5 billion to the company Intel in order to boost chip production on American soil. Today's investment helps all Americans in red states and blue states, which Congress passed in 2022 to help make the U.S. a leader in semiconductor manufacturing. If we invented in America, it should be made in America. The thing is, none of the world's leading edge chips are made in America today.

But now the U.S. is trying to carve its own path by building massive semiconductor factories in places like Ohio and Arizona. The goal is to build the advanced chips that power things like artificial intelligence and military weapons right here at home. Some of these factories, they'll pour more concrete to lay the foundation than the Burj Khalifa in Dubai,

the tallest building in the world. They're huge, massive complexes with $20 billion of investment. That's Stephen Witt, a writer who profiled NVIDIA for The New Yorker. Now, the big problem they face is a lot of other countries are building similar things right now. So by the time they come online, there could be a glut of supply. Consider this. The U.S. currently makes zero of the world's leading-edge semiconductor chips. By 2030, the Biden administration wants to make one-fifth of them. So how will America get there? From NPR, I'm Elsa Chang.

It's Consider This from NPR. President Biden just awarded $8.5 billion to the company Intel to help fund semiconductor factories in Arizona, Ohio, New Mexico, and Oregon. That's why today's investment is such a big deal. That's the president during a visit to Intel's campus just outside of Phoenix. We will enable advanced semiconductor manufacturing to make a comeback here in America after 40 years. The money for Intel comes from the $39 billion set aside by the 2022 Chips and Science Act to build chip factories. The Biden administration's goal is for 20 percent of the world's leading-edge semiconductor chips to be made on American soil by 2030. That's up from the zero percent we're at right now.

I asked U.S. Commerce Secretary Gina Raimondo why this investment is such a priority. And she said, aside from creating tens of thousands of jobs, making chips in America is also a matter of national security. Right now, we buy all of them from Taiwan and Korea. Right. So it's absolutely critical that we get to at least 20% just so that, you know, we're not dangerously reliant on a couple of countries for our supply. In terms of Intel, you know, it'll get us maybe a quarter of the way there. A quarter? We will be making other announcements in the months to come. But Intel is our champion company. It's the only U.S. company that can make leading-edge chips, and so we're excited to be backing them.

Well, what about the question of talent? Because one large concern that we're hearing from executives in the semiconductor industry is that there is a shortage of technical talent. Now that the chips money is rolling out, have you seen any real dents in this pretty broad talent shortage problem? It's a real issue, Elsa. I'm glad you brought it up. It is a real issue. In fact, if you talk to these semiconductor companies, as I have done, they'll tell you talent is their number one concern. I'll give you a perfect example. Just this one announcement will create about 30,000 new jobs.

That's construction jobs and manufacturing jobs. It's just one company. Well, one recent estimate that I saw is that all these new manufacturing plants will create a lot more jobs than universities can fill with new graduates, like 67,000 unfilled jobs. So how does the U.S. even begin to try to help these companies fill those jobs, those technical jobs? We have to get creative. You know, they can't all be for four-year college degree people. So, for example, Intel's partnering with the Maricopa Community College to launch what they call a Quick Start program, which is a first-of-its-kind semiconductor technician program. It's free.

It's two weeks, and it prepares students for careers as semiconductor technicians. So we're also working with high schools. You know, we're partnering with the Teachers Union to work in high schools all across the United States. That just sounds like such a long process. One community college, high schools, it could take years, right, to train people up to fill thousands, tens of thousands of technical jobs. I think it will take a long time to get to that. But as I said, this one with Maricopa Community College, it's a two-week program. A lot of these are six-month programs. $50 million of the grant that we're giving to Intel is for workforce training. So to help them partner with colleges, community colleges, apprenticeship programs to get the system going. But, you know, it won't happen overnight. Is there a plan in place to try to attract more technical talent from overseas to these plants here in the U.S.? Like, how do you provide incentives for people to move here, people who are already trained up but in other countries?

The companies are doing that. So some of the companies that we will be partnering with will do that on their own. But really, this is for American workers. This is an exciting opportunity to train and employ tens of thousands of American workers in good-paying jobs. Half of the jobs, by the way, that we're creating don't require a college degree. And they're good-paying jobs. Intel offers jobs to kids right out of high school, starting salary $50,000 with benefits,

many of whom will be earning six figures very quickly. So on the one hand, you're right, it's a challenge. We have to train everyone. On the other hand, it's an incredible opportunity to get folks good-paying jobs. Well, let's move beyond jobs to national security concerns, because two years ago you said that the CHIPS Act was essential not just for the U.S. economy, but also for national security concerns. Can you explain that piece?

What national security risks does the U.S. face when most advanced chip manufacturing happens overseas? So every piece of military equipment, drones, satellites, nuclear weapons, all require chips, thousands and thousands of semiconductors. And right now, we, as I said, we don't make any in America. So that is, it's not where you want to be. Think about the pandemic. We all lived how scary it was that we couldn't get our hands on the products we needed when we needed them because our supply chains were concentrated in one or two countries in Asia. So that's what this is about. This is making sure that when the United States military needs to buy semiconductors for a fighter jet, you know, enough of them are made in America so that we're not dependent on one company in one country.

But is the U.S. moving quickly enough? Because China and the EU have also set aside tens of billions of dollars to attract ship manufacturers. And so far, including this new Intel grant, the Biden administration has only spent about a quarter of the $39 billion set aside for chip manufacturing. Is that fast enough to compete with countries like China or with the EU? You know, I don't know if you can ever go fast enough. We are working like crazy. I will say it was only a year and a half ago that Congress passed the law. We've hired over 100 people in the Commerce Department. We're putting the money out quickly. More important than going fast is getting it right. This is taxpayer money. First and foremost,

we have to be good stewards and protect taxpayers. And so it's a balance. You want to go fast, but you have to be careful and make sure you get the most you can. Well, we're talking about billions of dollars of government money being invested in a way that we have not seen in decades. What worries you most about all of this going as planned? It's hard to limit it to one thing, but because as you said, it's incredibly ambitious. You know, we just, we have to get it right. By the end of this decade, we have to be producing the most sophisticated chips in the world, in the United States of America, with American workers across many states. We've never done it before. And so, as you say,

there's a lot of risk and we just, we have to get it right. And we will get it right. That is U.S. Commerce Secretary Gina Raimondo. Thank you very much for joining us. Thank you, Elsa.

This episode was produced by Janaki Mehta and Erica Ryan with audio engineering by Kweisi Lee. It was edited by Courtney Dorning and Christopher Intagliata. Our executive producer is Sammy Yenigan. It's Consider This from NPR.

I'm Elsa Chang.