US Secretary of Commerce Gina Raimondo said legislation to spur domestic semiconductor manufacturing needs rules to prevent funds from going toward production in China, but deferred to Congress on the details of such provisions.
“Congress will decide what, if any, legislative guardrails they want to put on this, versus if they want to defer on that and let commerce [department] handle it in the regulations,” Raimondo said on Thursday during an interview with Bloomberg reporters and editors in New York. “But it’s something we have to grapple with. The intention is to protect ourselves from China.”
The administration and Congress “will figure out the guardrails,” she said, but it is too soon to talk about specifics given that negotiations on the final bill are ongoing.
Photo: Bloomberg
US President Joe Biden administration recently spurned a plan by Intel Corp to increase production in China over security concerns, dealing a setback to an idea pitched as a fix for US chip shortages, Bloomberg News reported last month.
Intel, the world’s largest chipmaker, had proposed using a factory in Chengdu, China, to manufacture silicon wafers, people familiar with the matter said.
Company executives proposed the China plan as a way to help ease a global supply crunch of semiconductors. At the same time, Intel is seeking funds from the Chips Act to expand its footprint in the US.
Following deliberations with the Biden team, Intel has no plans to add the production in China at the moment, a person familiar with the decision said.
The scenario showcased a potential template for other companies that plan to apply for both US taxpayer dollar-funded grants to expand in the US, in addition to increasing their manufacturing in China.
Until now, the administration has not said whether it would support rules that come attached to the grant money.
Raimondo said “the whole point” of the US$52 billion program is to provide companies an alternative to China.
She said she has frequently discussed this with companies and her message is always the same: “Long-term national security interests matter more than short-term profits. So let’s think carefully about the decisions we make.”
“American companies have a role to play in helping us collectively advance our national security interests,” Raimondo said.
The consequences for the US economy and national security would be “devastating” if there is a significant delay in passing the chips legislation, she said.
“If it can’t be done before Christmas, it has to be done in January, because the consequences of not facing this problem long run are really quite devastating to our economy and our national security,” she said on Thursday in a Bloomberg Television interview with Emily Wilkins and Joe Mathieu.
Despite bipartisan support, the legislation has been in limbo for months. Last month, US Senate Majority Leader Chuck Schumer and US House of Representatives Speaker Nancy Pelosi announced an agreement to craft a version of the bill that could pass in both chambers. So far, that has not yielded any new proposals.
US Senator John Cornyn on Wednesday said that the timing would likely slip to February.
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