“There is a very deep interconnection between the chip industry and the US defense industry,” says Chris Millerassistant professor at Tufts University and author of Chip War: the fight for the most critical technology in the world, a forthcoming book about the race between the United States and China to dominate the chips. “Both countries are preparing for a heavily computer-driven future of warfare.”
The legislation shows that the risks posed by China are one of the few things Democratic and Republican politicians can agree on. And it marks a shift in government from faith in the free market to the kind of industrial policy that is long out of fashion. On Wednesday, U.S. Commerce Secretary Gina Raimondo described the act as “an important step toward securing American science leadership and revitalizing America’s ability to make the chips that keep our cars on the road and our fighter jets in the air”.
Not all chipmakers have been fully behind the legislation, with some disturbing that this could unfairly benefit larger chip companies such as Intel who have been pushing hard for the money. Senator Bernie Sanders criticized previous versions of the legislation, noting that companies waiting to receive money had previously sent jobs overseas, a concern that persists in the final version.
“There are still questions about how the money will be dispersed,” Miller says. “We need to be sure to spend it in a way that moves the needle and doesn’t necessarily align lobbying.”
The United States must not only strengthen its manufacturing capacity, but also gain an advantage in the most advanced techniques, according to Jesus of the Alamo, a professor at MIT who studies advanced semiconductor designs. “It requires investment in R&D and accelerating the flow of new technologies from university labs,” he says.
This will leave major chipmakers such as Intel, a company that has made many missteps in recent years, with critical decisions to make around which technologies to invest in. For example, a technology known as advanced packaging, which refers to a way of bolting different types of chips together, promises to create new possibilities for chipmakers. The approach was used by Taiwanese company TSMC to create Apple’s most powerful chip to date, the M1 Ultra.
Del Alamo was the lead author of a white paper 2021 who argues that government funding should include funds for university research into new microchip technologies, programs that help universities create new chip companies, and resources to encourage the training of new students. He is involved in a coalition of universities and companies that plans to make specific funding proposals, given the significant funds for scientific research.
It’s important, Del Alamo says, that chips remain a government focus beyond this funding. “In this game, the winner takes it all,” he says. “Whoever comes out with the next most advanced technology takes a disproportionate amount of the profits first, and then that company can invest a lot of money in R&D to stay on top.”