White Houses pushes for chips funding as Intel loses patience

It’s been over a year since the Senate passed its bill to boost domestic semiconductor manufacturing — but with time running out before Congress’ August recess, the White House is pushing hard to make sure that funding gets through.

On Wednesday, Secretary of Commerce Gina Raimondo led a classified briefing with senators stressing the importance of chip funding as a national security concern. If Congress couldn’t agree on the broader bill before its upcoming recess, Raimondo urged it to pass the $52 billion in chip manufacturing incentives by itself.

“The message is, ‘Time’s up,’” Secretary of Commerce Gina Raimondo told CNN after the briefing. “It’s time to make it happen.

Passed as the US Innovation and Competition Act (or USICA), the legislation includes more than $52 billion for companies manufacturing semiconductors in the US. But despite broad bipartisan support for the measure, it has failed to get a vote in the House due to lingering concerns about how the bill would overhaul federal research and development subsidies.

The stalled funding has been particularly urgent in Ohio, where Intel planned to spend $20 billion to build an ambitious new semiconductor foundry. Groundbreaking for the foundry was initially planned for July 22nd but has been put on hold while the funding remains in limbo.

In a Washington Post Live interview earlier this week, Intel CEO Pat Gelsinger said the project would likely move to Europe if the funding is not approved.

​​“We’ve made super clear to McConnell, to the Democrats, to the Republicans, that if this doesn’t pass, I will change my plans,” Gelsinger said. “The Europeans have moved forward very aggressively, and they’re ready to give us the incentives that allow us to move forward.”

Senate Minority Leader Mitch McConnell has also vowed to block the chips funding if Democrats decide to approve it as part of a broader reconciliation package allowing Medicare to negotiate prices with drug manufacturers. “There will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill,” McConnell tweeted last month.

Still, the tech industry has been unanimous in its support of the funding, which is expected to have a broad impact on the industry. In December, Alphabet CEO Sundar Pichai and Apple CEO Tim Cook joined more than 50 other executives in a letter to congressional leadership supporting the funding.

“As you know, semiconductors are essential to virtually all sectors of the economy,” the executives wrote. “Unfortunately, demand for these critical components has outstripped supply, creating a global chip shortage and resulting in lost growth and jobs in the economy.”

On Thursday, Raimondo is expected to turn her attention to the House in another classified briefing on the bill. In an interview with Axios on Wednesday, Raimondo said that lawmakers “are coalescing around the path of [passing] CHIPS immediately and then live to fight another day on the rest of it.”