Press Briefing by Press Secretary Karine Jean-Pierre and Commerce Secretary Gina Raimondo
James S. Brady Press Briefing Room Washington D.C. September 6, 2022 12:12 P.M. EDT
MS. JEAN-PIERRE: Hi, everyone. Good afternoon.
Q Good afternoon.
MS. JEAN-PIERRE: Welcome back. I know you guys are excited to be back with us.
Okay. So I'd like to introduce Secretary Gina Raimondo, who has joined us here many, many times before. And we're excited to have her back today to announce the next steps that the Department of Commerce is taking to implement the $50 billion of CHIPS Act funding.
So, with that, I'm going to let the Secretary take it away.
SECRETARY RAIMONDO: Thank you. Thank you. Hello, everybody.
SECRETARY RAIMONDO: Hello, everybody. It's great to be here. And this is a very exciting day. For those of us who are obsessed with and excited about CHIPS, this is a big day.
As you all know, thanks to President Biden's leadership and the bipartisan work in Congress, we now have an incredible opportunity to unleash the next generation of American innovation, protect our national security, and preserve our global economic competitiveness.
As we have talked about for decades, in the United States, our innovation ecosystem and investments in innovation have been in decline. And today begins a new chapter in revitalizing U.S. innovation and research and development. And today we begin to reverse the decline and lead the world again in semiconductor innovation and research and development.
CHIPS for America, as the bill is called, represents a historic investment in our domestic manufacturing industry, which has critical implications for our economic and national security.
With this funding, we're going to make sure that the United States is never again in a position where our national security interests are compromised or key industries are immobilized due to our inability to produce essential semiconductors here at home.
This past year, we saw the impact of the chip shortage on American families when car prices drove a third of inflation because of lack of chips, factory workers were furloughed, household appliances were often unavailable, all because of a lack of semiconductors.
And as our economy and military become more reliant on technology, it's that much more essential that we develop a strategy with values, outcomes, and structures that enable us to plan for an economy and manufacturing infrastructure that positions us to compete today and into the future.
So I want to take the next few minutes to lay out for you where we are and how the Department of Commerce plans to implement the $50 billion in CHIPS funding that we will be overseeing.
So with the CHIPS funding, we're setting out to achieve four primary objectives:
First, to establish and expand domestic production of leading-edge semiconductors in the United States. Today, the United States consumes more than 25 percent of the world's leading-edge chips and produces zero of those chips.
Number two, we want to build a sufficient and stable supply of mature node semiconductors. We consume 30 percent, produce 13 percent. We need to fix that.
Number three, invest in research and development to ensure the next generation of semiconductor technology is developed and produced right here in the United States.
And number four, in the process of doing all this, we will create tens of thousands of good-paying manufacturing jobs and more than a hundred thousand construction jobs. This effort will ensure the pipeline for these jobs expands to include people who have historically not had a chance to participate in this industry, including women, people of color, veterans, and people who live in rural areas. And that is explicitly required in statute, and we will carry out Congress's intent.
To achieve these goals, CHIPS for America will support three distinct initiatives. Two of those initiatives, which total $39 billion, will make investments in domestic chip manufacturing here in the United States.
First, we will make large-scale investments in leading-edge manufacturing. CHIPS for America will target approximately $28 billion in manufacturing incentives to establish domestic production of leading-edge logic and memory chips that require the most sophisticated processes available today.
Second, we will invest about $10 billion in new manufacturing capacity for mature or current-generation semiconductors. This will help us increase domestic production across a range of chips, including the chips that are used in cars, medical devices, communication technology.
And third and finally, we're going to make historic investments to strengthen America's research and innovation leadership. Eleven billion dollars - and this is - this is not as talked about; we always focus on the incentives for the companies, but in many ways, this could be the most exciting piece of what we're doing. Eleven billion dollars will go to research and development programs, including the creation of a National Semiconductor Technology Center.
In terms of timeline, we expect to be in a position to receive application from companies no later than February of 2023. So we're targeting February of 2023 to put the notice of funding opportunity on the street so companies can begin to apply.
Our priority is funding applications for incentive programs. It will be put out on a rolling basis, and we will evaluate each application one at a time.
Before I close, I want to take a second, or minute, to send a very clear message about how we plan to protect taxpayer dollars in this program.
This is not a blank check for companies. This is not for them to pad their bottom line. There are clear guardrails on this money, and the Department of Commerce intends to be vigilant and aggressive in protecting taxpayers.
CHIPS funds cannot be used for stock buybacks. CHIPS funds are not intended to replace private capital. That is key. We're going to look after every nickel of taxpayer money. Taxpayer funds are only used to fill gaps and secure other funding as loan guarantees, not to replace private capital.
These funds are intended to help companies maximize the scale of their projects. We're going to be pushing companies to go bigger and be bolder. So if a company already has funding now for a $10 billion project, we want them to think bigger and convince us how they can go from $10 billion to $50 billion with use of the taxpayer financing.
We - Commerce Department has the ability to claw back money. And make no mistake about it: We will use that clawback authority if, after giving the money to a company, they fail to start their project on time, fail to complete their project on time, fail to meet the commitments that they've made.
We're also going to be implementing the guardrails to ensure those who receive CHIPS funds cannot compromise national security by - they're not allowed to use this money to invest in China, they can't develop leading-edge technologies in China, they can't send latest technology overseas.
These are some of the most stringent taxpayer protections and guardrails we've ever had, and the American people are counting on us to get it right. And it's a responsibility that we take very seriously.
I'll just end by saying - by thanking the President and by thanking Congress for their leadership. No one has done more to revitalize American manufacturing than President Biden, and CHIPS for America is a key component of that work.
With this, we're going to jumpstart high-tech manufacturing and drive economic growth. We're going to create the kinds of jobs that will create opportunity for Americans - high-wage jobs that we want our children to have. We're going to revitalize an innovation ecosystem that for decades has been withering and will add rocket fuel to our global competitiveness, ensuring that America maintains its status as a leader for generation to come.
First and foremost, this is about protecting our national security and providing a blueprint for long-term economic prosperity.
And so we're excited. People say to me, "Secretary, CHIPS passed. What do you do now?" Now we get to work, and we're excited to begin that work.
MS. JEAN-PIERRE: All right. We're just going to take a couple questions. We have to get out of here by a certain time today, as you all know.
Go ahead, Phil.
Q Thanks, Karine. Thanks, Madam Secretary. On your point about taxpayer protections, there seems to be kind of a natural tension here in the sense that a huge sum of money, very clear urgency on the government side, finite universe of private sector entities who can probably take advantage of this. Walk me through how this actually works in terms of ensuring that those companies don't have leverage, given how much the federal government wants to kick this into high gear.
SECRETARY RAIMONDO: Yeah, great question. So, today we put out our strategy document, which I'm sure you've all read every word of. So we put out the strategy document today, which sets forth our principles and criteria at a high level. And now we begin the work of putting forth, between now and February, more granular criteria and strings attached.
So what we know is companies who receive CHIPS fundings can't use those fundings - funds to invest in other countries, can't use them for stock buybacks.
Companies who receive CHIP funds can't build leading-edge or advanced technology facilities in China for a period of 10 years. Companies who receive the money can only expand their mature node factories in China to serve the Chinese market. So there - this is what we know.
What I can tell you is we're also right now recruiting a team at the Commerce Department of experts. We're going to have folks who have a history of hard-nosed negotiation from the private sector, people who are semiconductor industry experts, and we're going to negotiate these deals one at a time and really putting the screws to these companies to prove to us - we're going to need proof from them to us in the form of financial disclosures, in capital investment plans - prove to us the money is absolutely necessary to make these investments.
They're not going to get any more than necessary to make these investments. And as I said in the beginning, this isn't money to make them more profitable or pad their bottom line, it's the money to make these investments and also invest in the community.
MS. JEAN-PIERRE: Go ahead, Jordan.
Q Thanks. On a different topic, CFIUS is reviewing the situation with TikTok. When do you expect that will resolve itself, that review? And will the administration, after that review, take any action to ban TikTok? Or short of that, how would the administration expect to address security concerns presented by the app by the government of China?
SECRETARY RAIMONDO: Yeah, so as you say, it's under review, and I have nothing more on that today.
Q On what - on another thing that has been a ball in the air - China tariffs. I know USTR made an announcement about that last week, but that wouldn't necessarily preclude the administration from lifting tariffs on some goods. Where does that stand right now?
SECRETARY RAIMONDO: Also I have nothing on that.
MS. JEAN-PIERRE: Go ahead. Alex? Oh, I'm sorry. (Laughs.)
Q I was actually going to ask those very same questions.
MS. JEAN-PIERRE: Okay.
Q If you don't mind - if you don't mind, though - on the tariff question, you know, it's been in the public domain for quite some time. Is it fair to assume that's not going to happen before the midterms?
SECRETARY RAIMONDO: I don't have anything else to say.
MS. JEAN-PIERRE: On topic?
MS. JEAN-PIERRE: Okay. If it's on topic, go ahead. (Laughs.)
Q It's really on topic. You talk about this - about this stringent review and the information is going to be posted by February. Bottom line for us: How quickly is an American going to get hired with this money? And how quickly before somebody is buying a phone with one of these American-made chips in it?
SECRETARY RAIMONDO: Yeah. So, great question. You -
Q And then I have a follow-up to that.
SECRETARY RAIMONDO: You've already seen chip companies making big announcements. Micron is announcing a huge new facility. I was just in New Hampshire; onsemi is breaking ground on a new facility. Intel announced a new facility.
These investments have been made by these companies because the CHIPS Act passed, and they have confidence now that the money will be put out the door.
So you're going to - I can't answer you - you know, how quickly exactly a specific chip is going to come. But the point is, you're already seeing it. GlobalWafers made an announcement - $5 billion investment in Texas. So I'd say immediately; the effects are immediately being felt.
In terms of our process, February, like you said, we'll begin the process. I think you can start - I'm going to hope to start putting money out the door, you know, next spring to specific companies.
Here's the thing: There's going to be a range of projects. There'll be smaller, simpler projects, maybe for expansion of existing facilities. And then there'll be very large, complex, leading-edge projects.
I think you could see in the spring of next year some of the smaller money going out the door.
Q And do - you listed a very stringent list of criteria: It can't be invested into stock buybacks; can't be for chips that get made or sold in China, unless they're for the Chinese market; a bunch of other things. Do you know that companies exist right now that are willing to meet those stringent demands? Do you check that before you publish them?
SECRETARY RAIMONDO: Yes.
Q So they're ready to go -
SECRETARY RAIMONDO: Yes.
Q - with what's there?
SECRETARY RAIMONDO: Yes.
Q And do you at the Commerce Department then have the money necessary to hire those top-notch negotiators, the specialists -
SECRETARY RAIMONDO: Yes.
Q - or do you need more from Congress? Because often -
SECRETARY RAIMONDO: Yes.
Q - what ends up happening: We get a big government announcement - "multibillion dollars; here it comes from the federal government" - and three years later, we're writing stories, telling stories about how that money was mismanaged and the department that was overseeing it didn't have enough. You're saying you do?
SECRETARY RAIMONDO: Yes, I do. What we're doing right now is we're in the process of hiring about 50 people. We do have the money. They will be expert. And I have absolute confidence we will be able to do this.
Also, the answer to your first question is - again, Micron wouldn't be announcing a massive expansion in Idaho if CHIPS weren't passed. So, yes, they know the strings are attached. And, yes, they will operate under those strings.