▶ 0:12:53In a statement. >> good afternoon, everyone, and welcome to today's hearing examining the state of the semiconductor ecosystem from consumer devices and household items to ai applications, semiconductors or chips are critical components to today's society and are essential to our national and economic security.
▶ 0:13:19Semiconductors come in many forms, as you know, logic and memory, leading edge and legacy, each serving distinct and indispensable functions across the economy. For decades, the us has dominated the world stage of semiconductors, leading in areas such as global revenue, manufacturing capacity and semiconductor design, to name just a few.
▶ 0:13:49But that leadership is no longer guaranteed. Unfortunately, american semiconductor manufacturing capacity has declined over 25% since 1990. Our adversaries, particularly china, are actively seeking to unseat us from global leadership and disrupt our supply chains.
▶ 0:14:11Through my work on the energy and commerce committee and the select committee on china, I've seen firsthand the strengths and strategic vulnerabilities of the us semiconductor ecosystem that defines our strategic competition with china.
▶ 0:14:27While the us remains a leader in semiconductor design, china is rapidly scaling its own capabilities, uh, backed by significant state subsidies and maintains a dominant position in the rare earth materials critical to chip production. At the same time, demand for semiconductors is being transformed by artificial intelligence.
▶ 0:14:54Ai applications are among the most critical use cases of semiconductors in today's society. Ai is the leading use case for semiconductors, and the ai surge is responsible for over half of the total semiconductor revenue, potentially reaching $500 billion this year, and I and $1 trillion by 2030. Ai is critical.
▶ 0:15:23It's a critical driver of economic growth, as you know, ceding global leadership or leaving our semiconductor supply chains vulnerable to disruption at the hands of china could be catastrophic for us leadership in ai. The good news is that we have not ignored these emerging threats between congressional and executive action, including actions in this committee.
▶ 0:15:52There's been an array of actions to strengthen us global semiconductor leadership. This hearing will also examine those solutions and consider what other actions may be taken. Thank you again to all of our witnesses for being here. We appreciate you so very much. Thanks for the time. I'm looking forward to hearing your expertise and to the conversation ahead.
▶ 0:16:17So I'll yield back and recognize the ranking member of the full committee. Uh, actually, the subcommittee, miss schakowsky for her five minutes for an opening statement. You're recognized. >> thank you. Chairman. Um. Well, this is, uh, an important debate that we're having right now. Um, the american people.
▶ 0:16:49Um. Excuse me. >> rely on. Yeah. >> the american people definitely rely on these, uh, chips. And, um, I'm missing it here. >> president biden asked yousef.
▶ 0:17:14>> president, president biden did the, uh, the, the chips act, which created a lot of jobs for a lot of people. But what has happened now is, unfortunately with, um, president trump, um, we are, we are seeing that a lot of those jobs are not are going away.
▶ 0:17:42And it's too bad that we are not being able to have the jobs that were, that have been created, um, over a number of, of years when, uh, by the last president, um. >> good point. Over time. >> we ought to be prioritizing our workers.
▶ 0:18:12That's the important thing that we should be doing. And unfortunately, I think that is not exactly what has been, uh, has been happening. And I hope we can get back to that, to that so that we can not only have the, um, good things that we need for our people and for our workers. >> that's it.
▶ 0:18:46>> what I yield back. >> okay. Thank you very much. Gentlelady yields back. I thank her for that. And now recognize the chairman of the full committee, Mr. guthrie, my good friend, uh, for five minutes for an opening statement. You're recognized, sir. >> thank you, Mr. chairman. Thank you for convening this important hearing. And I want to thank all of our expert witnesses for being here.
▶ 0:19:09Uh, semiconductors are foundational to the modern to modern technology and to our economy, from smartphones to cars and household appliances to advance ai systems, these chips are embedded in nearly every aspect of our daily lives, but their importance goes far beyond the many end uses. The semiconductor industry is a major driver of economic growth, supporting millions of jobs and generating tens of billions of dollars in export revenue.
▶ 0:19:39Semiconductors are also central to the ai infrastructure boom, which is already delivering tangible benefits to americans through economic growth, tax revenue, reinvestment in their communities, and innovations that improve the quality of life. However, the benefits are not a guarantee. The us semiconductor manufacturing capacity does.
▶ 0:19:57Us manufacturing capacity has declined from its historical highs, and while we remain leaders in design and advanced equipment, that leading edge is under pressure from strategic competitors and adversaries.
▶ 0:20:10In the wake of the covid 19 pandemic, we saw how semiconductor shortages exposed the vulnerabilities in our supply chains, costing families and the economy hundreds of billions of dollars in response to the trump administration has taken meaningful steps to strengthen american competitiveness across the semiconductor ecosystem, helping to secure a half $1 trillion in private investments to boost our domestic semiconductor capabilities, drive significant economic growth, and support our national security.
▶ 0:20:39However, we're at a critical inflection point. Our global leadership is being challenged, our supply chains remain vulnerable, and the stakes of our economy and national security cannot be higher. At a time when demand for semiconductors is is at an all time high, we must examine the state of the semiconductor industry and what more must be done to ensure continued american leadership.
▶ 0:21:01And I was talking with some earlier, and every time I talk with my colleagues on both sides of the aisle, we absolutely all agree that the number one priority that defeating china in every aspect, particularly in in technology, is the number one priority. I think you can get 435 votes. Or if you said we're going to beat china, I think I do believe in the bottom of my heart. Everybody wants to do that. And so we got to figure out the right pathways to do and how do we do it.
▶ 0:21:29And and it's also who controls technology. Our friend gary palmer, who's on the subcommittee today, always says it's not going to be a superpower, but the superpower. And so what we're talking about today is extremely important. This is the building block. I don't even want to say block. It's like a speck now. It's just amazing. Uh, when you look at the scale of what our industry is, this industry has become and what is becoming and the minuscule chips and the power that they have.
▶ 0:21:58I remember they used to have calculators that cost $80 that just added and subtracted. And now I'm old enough to know that. And so then now they don't. It's just amazing what happens. I remember going to see a computer. I did a field trip to see a computer when I was a cub scout, and that computer, which took up an entire room in a credit union, couldn't do what this phone does and even close to it. So it's amazing what you guys have done, what your industries have done, and there's so much more to do.
▶ 0:22:27And I really believe that all of us on both sides of the aisle on this committee and in congress, want to make this happen and figure out the right pathway where we can find common ground to make sure we beat china. Thank you, and I will yield back. >> thank you, Mr. chairman, I appreciate it. I'm old enough to remember, too, those calculators, $80 calculators, texas instruments, I think that was the first one.
▶ 0:22:50Anyway, uh, let me go ahead and yield to my good friend, uh, miss caster, who will be representing the ranking member today. I'll yield to you for five minutes for your opening remarks. >> well, thank you, chairman bilirakis. Uh, yes, ranking member pallone is debating legislation on the floor.
▶ 0:23:08So if he were here, uh, he would be offering this this statement, but I this is a very important hearing examining the semiconductor ecosystem because semiconductors are a critical part of the electronic devices we use every day, everything from computers to phones to cars to medical equipment and more. There are also, uh, fundamental to artificial intelligence and the processing power to train ai systems.
▶ 0:23:33And while the united states has been a consistent leader in chip design, the same cannot be said for chip manufacturing. Since 1990, the nation's share of global semiconductor manufacturing dropped from 36% to just 10% in 2020. And during the pandemic, we saw the impact of this decline when global supply chains from everything from autos to video game consoles were disrupted.
▶ 0:24:02This led to higher consumer prices and concerns about access to chips for critical sectors. In response to the national and economic security threats due to the lack of domestic semiconductor manufacturing, congress passed and president biden signed into law the chips and science act in 2022.
▶ 0:24:23This landmark legislation provided $50 billion in funds to support domestic manufacturing and research and development of chips.
▶ 0:24:35As of july 2025, almost exclusively thanks to the biden administration, the department of commerce had awarded about $30 billion to 19 companies in manufacturing grants for projects across the country, including in arizona, ohio and new york.
▶ 0:24:54We should be building on that progress, but instead, the trump administration has slashed the expert personnel dedicated to chips, has shut down nat, a nonprofit dedicated to distributing r&d funds under the law. And at a time when other nations are investing heavily in research and development, it is irresponsible and dangerous to delay america's efforts.
▶ 0:25:22Even more irresponsible president trump's reckless war with iran and the chaotic tariffs that are straining the already complex and fraught semiconductor manufacturing supply chains at a time of unprecedented, unprecedented demand for chips.
▶ 0:25:41This demand is driving a shortage right now of memory chips, which is raising prices for consumer devices at a time when americans are already struggling to afford basic goods like gas and groceries. Finally, as we talk about semiconductors, which make possible the ai models that are becoming increasingly enmeshed in our lives, we cannot ignore the downstream impacts of those models on americans, including the privacy impacts we should
▶ 0:26:13Be protecting consumers using ai through strong bipartisan federal data privacy legislation that includes both robust data minimization to defend consumers from abuse of their personal and sensitive information and safeguards in the face of ai enabled, consequential, consequential decisions about health, employment, and more.
▶ 0:26:36We also must allow states to continue to play a role in keeping their citizens safe in the in the age of ai. Uh, I'm really looking forward to the expert testimony today. The congress needs your help and advice as we move forward on policy. Uh, thank you, Mr. chairman. I yield back the balance of my time. >> thank the gentlelady. Uh, now we'll recognize our witnesses. Uh, Mr. jason grebb, the senior vice president of corporate planning and intel.
▶ 0:27:07Thank you very much. Welcome. Uh, Mr. charles wessner, nonresident senior advisor, renewing american innovation program, center for strategic and international studies. Welcome, Mr. assad. Ramzan ali, uh, director of ai and technology policy, vanderbilt policy accelerator, vanderbilt university. Welcome. And finally, Mr.
▶ 0:27:34Jason oxman, president and ceo of information technology industry council, welcome to all of you. And we'll go ahead and begin with Mr. greb. Uh, you are recognized for five minutes. >> chairman bilirakis, ranking member schakowsky, chairman guthrie, and distinguished members, thank you for the opportunity to testify on the semiconductor ecosystem and its central role in artificial intelligence.
▶ 0:28:01Semiconductors are no longer just an input to the digital economy. They are the foundation of economic competitiveness, national security and technological leadership. Leadership in semiconductors will determine leadership in ai. Intel is the only american company that designs and manufactures leading edge logic chips, and what makes us distinct is not just what we build, but where and how we build it.
▶ 0:28:24Our technology development and manufacturing is conducted in the united states, using us developed process technology and ip. We are investing more than $100 billion in new and expanded facilities in arizona, new mexico, oregon and ohio and have committed approximately $93 billion to domestic r&d since 2020.
▶ 0:28:47Co-locating r&d with manufacturing is a national security advantage, and one of the reasons intel partners with multiple federal agencies, including the department of energy ai, has moved from breakthrough technology to backbone technology at an extraordinary speed, driving a surge in compute demand. Any. Like anything else in the history, this creates three realities an opportunity because the us is the world's largest market for ai.
▶ 0:29:16Compute a challenge because a single leading edge fab cost upwards of $20 billion and takes years to build, and a national security imperative because nations that lead in ai compute have asymmetric advantages in intelligence, autonomous systems, and cyber operations. The question is straightforward will the united states build the infrastructure that powers the ai era, or depend on others to supply it? Intel's answer america must build.
▶ 0:29:44The global semiconductor supply chain is under pressure from three forces at once. Surging ai demand, geopolitical competition and concentration points of failure. Active conflicts have disrupted access to noble gases essential to chip manufacturing. Critical minerals minerals are disproportionately refined in china. Over 90% of leading edge production remains concentrated in taiwan. The trump administration's agreement with japan and taiwan are driving further us investment.
▶ 0:30:13The chips act has catalyzed more than $500 billion in announced private sector commitments across 28 states, but the work is not done. Intel urges trade policies that strengthen rather than tax domestic manufacturers, with targeted exemptions for specialized inputs unavailable domestically. Update a country of origin rules and duty drawback programs that incentivize global customers to buy american made chips. Two areas require near-term action.
▶ 0:30:42First, the us approval process for specialty chemicals used in advanced manufacturing is significantly slower than in taiwan, korea and japan, with the epa's authority expiring september 30th, congress has a timely opportunity to level the playing field without compromising health or environmental protections. Second, the semiconductor industry will need 115,000 additional workers by 2030, with more than half at risk of going unfilled.
▶ 0:31:09Intel has committed $100 million over ten years to workforce development, alongside the nsf, university and community colleges. The federal partnership, through stem education and sustained training is essential to scale. The chips act has been essential to restoring us competitiveness.
▶ 0:31:28Intel has received $8 billion under its chips agreements, with 3.2 billion more available under the secure enclave program supporting manufacturing in arizona, oregon, new mexico and ohio. Equally critical is the bipartisan advanced manufacturing investment credit under irc section 48 d, its scheduled expiration at the end of 2026 risks slowing momentum precisely as global competition intensifies.
▶ 0:31:54We urge this committee to extend the amoc and provide the certainty these long term, capital intensive investments require. The decision congress makes on semiconductor policy will determine whether the united states leads or follows in the technologies that define our future. At the center of that question is a simple reality. If you do not build the chips, you do not control the future of ai. Intel is the only american company that designs, develops and manufactures leading edge technology at scale on us soil.
▶ 0:32:23This is a strategic, strategic national asset and it is not guaranteed. It depends on sustained, investment aligned policy and national commitment. The window to act is narrow, but the path is clear. America must set the pace. Thank you. >> thank you, Mr. grebe. I appreciate it. Now, doctor wesner, you're recognized for five minutes. >> thank you. Thank you, Mr.
▶ 0:32:54Chairman and ranking member sokolowski and members of the committee, I appreciate the opportunity to speak with you. Um, I, uh, I'm a senior advisor at the center for strategic and international studies with an appropriately named program renewing american innovation.
▶ 0:33:12I have the pleasure to work with the group led by my colleague behind me, doctor sujay shiva kumar, um, who has brought a, a vision, uh, to what we need to do to address the competitive economy that we face. Um, I was very pleased to hear the chairman's remarks that, uh, there's an understanding here that semiconductors are not merely another industrial sector.
▶ 0:33:39They're foundation foundational to the economic growth and military capabilities. And if I had one simple message for you, we ought to treat the industry that way. They're key to our civilian economy, key to our health, key to our communications, key to our ability to, uh, to identify threats and address them. Uh, and we sometimes seem to act as if they're just another industry.
▶ 0:34:08Um, but in fact, in fact, they're not as some of the actions in the streets, uh, may be demonstrating today. Um, in fact, the largest, uh, affirmation you can have, uh, or the strongest affirmation you can have the importance of chips is chinese policy. China policies.
▶ 0:34:30You know, you hear criticisms, old criticisms, inappropriate criticisms that we don't want to pick winners and losers. Uh, as a professor at georgetown, I would beg to differ with you. We have had industrial policies since about 1787, and we're still going strong. If you wonder if we have industrial policy, ask yourself what the department of agriculture does with the department of energy does.
▶ 0:34:56I mean, these are institutions that provide support for critical sectors. The, uh, the chinese, on the other hand, are not reluctant to pick winners. Uh, they intend to be the winners and they're acting like it. You know, it is great, sir, that we got $52 billion for the chips act. Uh, in that same time period, the chinese put put in 150 billion.
▶ 0:35:21Uh, it may well be that there's substantially more than that, given provincial grants to producers. I don't mean to say that just because there's a grant. Everything is well spent. There's massive technological advance. Um, but there is technological advance. The um.
▶ 0:35:45And one of the problems we have with our efforts to control, uh, chinese access to our advanced technologies. To put it simply, one of the main problems is they already have it. They're now at parity with us. I was as part of our program, we were visiting aist in japan, and one of the leading officials there looked at us and said, why are you trying to block china?
▶ 0:36:11I mean, you may have good reasons to want to, uh, but there are a billion of them. They have all the money they need, all the money they can spend. And you have educated all their best scientists at mit and elsewhere in the us. You really think you're going to stop them? We may slow them, and that may be a useful thing to do.
▶ 0:36:33Uh, but it has to be a very targeted effort to slow not not to block the um. Proof of that is that chinese firms have made substantial progress in overcoming the effects of controls in areas of semiconductor manufacturing, matching semiconductor manufacturing equipment and materials.
▶ 0:36:59They can produce higher node chips very close to the leading edge. Um, and, you know, I sometimes think when on the, on a navy destroyer, they see an incoming missile, they really don't turn and say, ah, but that's a, that's a few nodes behind our best missiles. No, actually, they've got a missile coming straight at them. Uh, and that good enough strategy is what often characterizes, uh, chinese policy.
▶ 0:37:27Uh, china also has been looking ahead for decades, uh, their hold, as you mentioned, on rare earths and minerals that combined with their control of magnets, gives them a potentially decisive edge in the equipment industry, not just in chips, but in equipment industry itself. So what we need are proactive investments. We have to combine our defensive measures with a careful assessment of what are their actual impacts.
▶ 0:37:56You know, if I if I can say, sir, with great respect, what we have to avoid here is who's toughest on china when the trick is they end up being toughest on our own industry with restrictions to the revenue. That's absolutely crucial for them to be able to invest and compete. This is not an idle point. You cut revenue by 20%. You've cut r&d by 20%. The. We also need to pay attention to our own house.
▶ 0:38:25Um chips are highly dependent on robust physical infrastructure. Reliable electricity is. I think the whole world is beginning to understand. And it requires power generation for both traditional. >> can you wrap up in the next ten 20s because we've got to move on. Thank you.
▶ 0:38:46>> we need to inform, invest more and, and, uh, recognize the effects of our policies and do what we've done in the past, which will support our industry in every way possible. >> thank you very much. Good enough. Our next we have, uh, Mr. ramzan ali. Uh, you're recognized for five minutes. Chairman bilirakis, ranking. >> member schakowsky, members of the subcommittee. Thank you for holding this important hearing.
▶ 0:39:13My name is asad ramzan ali, and I'm the director of ai and technology policy at the vanderbilt policy accelerator. My testimony reflects my own views, and I don't represent vanderbilt university or anyone else. Today, I'll talk to you about just three parts of the vast chips and computing ecosystem. First, I'll talk about the success of the manufacturing incentives of the chips act and early signs of that success, and also how its r&d programs are being gutted.
▶ 0:39:41Second, I'll discuss how today's ai boom presents risks to the semiconductor market and to the broader economy. Third, I'll close with a few things congress can do. I'll start with the chips and science act. In august of 2022, president biden signed the bipartisan bill. In that law, congress appropriated $39 billion to reshore chip manufacturing and $11 billion for r&d. Here are some of the early signs of success on the manufacturing side.
▶ 0:40:10In 2022, before the bill was signed into law, 0% of advanced chips were manufactured in the us. We're now on track for that to be 28% by 2032. So within a decade, and we're on track to be the only country in the world to have fabs from all five of the leading chip companies.
▶ 0:40:27These are early signs of success, but early success requires continued governmental leadership, recent administration actions that undermine or could undermine that success that have me a little bit worried include gutting chips, acts, uh, office staffing, conflicts of interest in certain deals, equity investments, including the recent one with intel without clear legal authority, transparency, and while wiping some of the previous guardrails.
▶ 0:40:55Um, turning to the $11 billion r&d program, the story here is much worse. At a high level, the biden administration was slow to get the programs off the ground, but the trump administration has reversed progress. Last year, the commerce department announced that it was dispensing with a nonprofit netcast set up to administer the r&d funds, and several statutorily required programs. In its place, the administration issued a broad funding solicitation.
▶ 0:41:22I worry less about the specific mechanisms, but I do worry deeply that this approach might subsidize what industry was going to do anyway. The goal should be to invest in what no one company or what the industry is going to do alone. The goal should be the national priorities for r&d. Stepping back on the chips act, manufacturing incentives are how the us regains global semiconductor leadership. R&d is how we sustain that leadership going forward.
▶ 0:41:52Pivoting from the chips act, I turn now to the ai boom that's driving half of all semiconductor revenues. Here's how to think about the money involved. Unprofitable ai firms are buying up cloud computing capacity, and those cloud computing companies are spending money on a lot of cash and borrowing a lot of money to to buy up chips and invest in data centers. Those chips are where a lot of the profits are flowing today in that ai chip market. Nvidia has 90% of the market share.
▶ 0:42:22One mechanism that's financing. All of this that I worry about is circular investing. Nvidia is using its profits to invest in cloud companies that buy nvidia chips. They're also investing in nearly every ai model company, every major model company, which are using cloud computing, which buys nvidia chips, and they're investing in dozens of other companies that depend on nvidia chips. But it's not just nvidia. Microsoft is a major investor in openai.
▶ 0:42:50Google invested in anthropic, and amazon invested in both across ai, cloud and chips. Major firms are now enmeshed. This practice is problematic because when vendors invest in unprofitable customers, they use their profits to self-finance growth and demand. This hinders market discipline by inflating revenues, increasing prices and reducing supply for other customers, and cementing a vendor's dominance by limiting competitors.
▶ 0:43:19These interlocking relationships also enable a problem in one part of the industry to cascade throughout the entire economy. Stepping back, these risks matter most because a lot of this is the public's money. Seven tech technology companies represent one third of the entire stock market. That's the 401 s pensions and life insurance plans of all of the american public. That's where I get concerned about the financial risks.
▶ 0:43:46I'll end by saying, I'll end by outlining where congress can act first, conduct oversight of chips, manufacturing deals, and make sure that the r&d missions get back on track. Second, investigate the circular financing before those risks spill over into the broader economy. Notably in 2002, after the.com bubble, this committee investigated the circular financing that caused that crash. Of course, investigations of financing mechanisms are better before the crash, but we have that time now.
▶ 0:44:15Third, enact policies that promote competition and protect consumers from the public costs created by the rapid growth of data centers. That's something I detail in my written testimony. Thank you again for having me, and I look forward to your questions. >> appreciate you very much. Next is Mr. oxman. You're recognized for five minutes for your statement. Thank you. >> thank you, thank you, chairman bilirakis. And to you and ranking member schakowsky and members of the subcommittee, grateful for the opportunity to be here with you today. My name is jason oxman.
▶ 0:44:44I'm the president and ceo of the information technology industry council, or I t I I t I represents 80 leading companies from across the technology sector, including every facet of the semiconductor ecosystem from semiconductor design, tooling, manufacturing and packaging to data centers and consumer and enterprise devices and services.
▶ 0:45:05It is member companies represent the entire technology ecosystem, and we rely on advanced and foundational chips to make the products and services available to all americans. We are in a global semiconductor race, and it is imperative that the united states continues to be the world leader in technology. The semiconductor supply chain is complex, it's global, and it's highly specialized.
▶ 0:45:31Chips made or designed in the united states can travel to several countries on their supply chain. Journey into your mobile phone, refrigerator, car, or medical device, for example, due to the reality of geology, american made chips necessarily include critical elements simply not found on the ground or under the ground in the united states.
▶ 0:45:54And because the us represents only 5% of the world's population, we must have access to global markets to sell to the world. The modern semiconductor packs billions of transistors into a chip that fits in the palm of your hand, and each chip can take months to manufacture in fabrication plants that cost billions of dollars to build. These chips power everything in our modern society. Dozens of these chips are in your phones.
▶ 0:46:21Hundreds of these chips are in your computer. Thousands of these chips are in your car. A global supply chain enables us based manufacturing of these chips in arizona and texas and ohio, using quartz sand from north carolina and specialized equipment developed in california, expanding our competitive advantage and chips requires policies that enable companies to better compete globally and make the united states a more attractive investment destination.
▶ 0:46:50Since the enactment of the bipartisan chips and science act, total public and private investment in the united states has exceeded $640 billion, supporting over half a million american jobs. In addition, us headquartered semiconductor companies have gained 2.4 percentage points of global market share in just the last three years.
▶ 0:47:12Public resources are helping unlock the private capital necessary to grow america's innovation, lead to meet domestic demand, and to win global market share. Congress can build on this success and the administration's efforts to support U.S. semiconductor and ai stack leadership by doing the six. Following things. First, enact common sense permitting reform.
▶ 0:47:34We need congress's help to speed semiconductor fab and data center construction, creating jobs, empowering the american ai economy without outdated rules holding us back. Second, invest in workforce development. We need more skilled talent here in america to build the domestic semiconductor industry. Third, extend and expand the american manufacturing tax credit, which expires this year.
▶ 0:48:01This advanced manufacturing tax credit is a powerful incentive for semiconductor investment by american companies and also by foreign direct investment from our allies. It should also encompass both manufacturing and research and design work. Fourth, realize the vision of the trump administration's ai export promotion program. Government has a critical role to play in expanding opportunities for the us ai stack, including exporting semiconductors.
▶ 0:48:29Fifth, avoid disruptive policies like overly broad tariffs. While tariffs can help achieve certain policy goals, they must be carefully calibrated to avoid causing collateral damage, such as increasing manufacturing costs or reducing investment, or raising consumer costs and making U.S. goods less competitive globally. And finally, consult with industry on economic security policies. Its members rely on transparent policy making.
▶ 0:48:58That's why we're so concerned with the recent decision of the federal communications commission to presumptively ban internet routers that are produced in any foreign country, including by american companies. This action risks raising costs for american consumers and businesses that rely on internet connectivity. The technology industry is eager to work with this committee to advance american leadership in semiconductors and the technologies that rely on chips.
▶ 0:49:28Thank you again for the opportunity to testify before this subcommittee today on this critical topic for the american economy, and I look forward to your questions. >> thank you very much. We appreciate it very much. Thank all of you for for your testimony. Very informative. Okay. Next, I'm going to recognize myself for five minutes for questioning. The us is in competition with china to dominate the semiconductor industry.
▶ 0:49:56How immediate of a threat is the people's republic of china to the us semiconductor ecosystem? And what does that threat look like? Please give me a brief answer. So first we'll start with Mr. grebe. If you can be very brief. And then professor wesner. And after that, Mr. oxman. >> yeah, briefly, I would say today, america and taiwan have a leadership advantage from technology development perspective.
▶ 0:50:24In terms of logic chips, china does have n minus two, n minus three technology that we're developing. From lithography perspective, the biggest risk we probably have is around critical materials that come out of prc that are used in the fabrication process, that we need to make sure that we can get allocation to and be able to use quickly to develop new lithography nodes. >> very good. Thank you. Thank you, professor weston.
▶ 0:50:46So I don't know if your mic is on. Is it is it on? >> I'm sorry. >> okay. Go ahead. >> I said I would join my colleague from intel with respect to the which is generally a good idea on semiconductors, which is um, particularly his point about the critical materials.
▶ 0:51:15Um, I think it's also important to note that there's essentially a captive market and one that we have encouraged where there's more and more purchasing, not based on quality, but on origin. Um, I think there's a strategic threat at the 28 nanometer node. Uh, we focus all our attention on the most advanced logic.
▶ 0:51:39Um, but in fact, those nodes are the ones that make all our systems work that support all our weapons. Um, and I've learned recently that by adjusting the equipment at the 28 node, you can actually go down to to 7 to 5 nanometers. >> all right. Thank you very much, sir, I appreciate it. I know maybe we can elaborate a little later. Uh, Mr. osman, please. >> yes. The short answer to your question, Mr.
▶ 0:52:08Chairman, is yes, china is an existential threat for two reasons. One, while we're investing $70 billion through the chips act in semiconductor manufacturing in the united states, china is doubling that. They're investing $140 billion. And they're not just investing for semiconductor manufacturing for china. They're investing for export for the world. They're trying to make products, companies like huawei, exporting them to the rest of the world in the hope that the rest of the world adopts the china technology stack.
▶ 0:52:33We want the rest of the world to adopt the us technology stack, and the policies that congress adopts can make that happen. >> very good. Thank you very much. Uh, okay. In new york times, story from february revealed that if the chip supply from taiwan was cut off, it was significantly reduced us economic output beyond that of the great recession. Scary man. Mr. grieve. And then either or both Mr.
▶ 0:53:03Oxman and professor wesner time permitting, what additionally, should the united states be doing to address the substantial supply chain vulnerability? And we'll begin with Mr. grebe. >> and the advancements and investments that we made from the chips act are extremely important, not only for leading edge technology, but for mature technology as well, because a lot of those devices go into consumer products, cars, etc.
▶ 0:53:32So we do agree with the assessment that if there was an issue with taiwan and being able to deliver silicon products to the united states, it would have a very, very dramatic impact on the gdp. So we hope to continue the investments in amec. We hope to continue the investments in r&d, and we hope to build out those nodes here in north america. >> okay. Briefly, Mr. wesner. >> I agree with your assessment of the vulnerability.
▶ 0:53:55Um, and I think we also have to understand the, uh, that despite lengthy search, we found, uh, no agreement with the earthquake gods who are responsible for the geology underlying taiwan. And simply a major earthquake would eliminate, uh, very significant part of the supply of global chips.
▶ 0:54:22The the chips act was designed to address that and did, uh, it resulted in over $500 billion in investment. Uh, we absolutely need to keep some form of just not just the investment tax credits, but also one involving grants. We can certainly involve that. We can ideally administer it faster. Um, and we also need to the plans that intel and other companies have in the us would help a great deal to mitigate.
▶ 0:54:52Uh, but as it is right now, we are extremely vulnerable to geological or geopolitical problems in taiwan. >> thank you. I want to give you an opportunity. I'm going over Mr. oxford, briefly. Mr. oxman, can you answer that question? >> yes. Mr. chairman, I think you're absolutely right to highlight the risk to global supply chains of that action. But I would say we've seen that already. We saw that during the pandemic and the importance of investing in the entire ecosystem here in the united states.
▶ 0:55:22And I think the importance of the advanced manufacturing tax credit is that it provides incentive for manufacturing installation here in the united states. My suggestion would be that we look at not only extending that, because it's scheduled to expire at the end of the year, but also to make sure it includes the rest of the ecosystem. We need to invest in semiconductor research and design here in the united states, and we can use tax credits to make that happen. >> good enough. Thank you very much. I'll yield back and I'll recognize the ranking member of the subcommittee, Mr. koski, for five minutes of questioning.
▶ 0:55:58>> I would say that my. Major concern is that we are getting. We are doing good work with hard working workers. And making sure that they are getting the kind of money that they should be getting, and I think they are not right now.
▶ 0:56:24I think that what we are doing is that we have taken away. The work that the. The hard working people are doing. They are not getting the kind of benefits that they should be getting right now.
▶ 0:56:50Corporations are making more money than they have been making before. And I want to see some changes made.
▶ 0:57:06I think that the hard working people who actually make sure that these products are, are used, that the work is being done, and that the people who do that work are getting the amount of money that they should get and the opportunity to be in control. I don't see it happening that way.
▶ 0:57:31But I what I want to what I want to see right now is that the the people who are doing the hard work are getting the kind of benefits that they have. And I think that they have been pushed aside. Unfortunately. I'm going to ask, um, um, Mr.
▶ 0:58:04Assad some, some questions, but I would also just like him to say, are we handling this the way that we should, which I think benefits the, the workers that benefits the people who are actually doing the work and that we are making sure that we aren't just benefiting the um, some.
▶ 0:58:33Companies that are making money, more money than they need to be making right now. Um, in fact, I think I'd like to, to leave right now and, uh, and, and turn it over to Mr. assad, um, to talk about what we need to be doing here right now.
▶ 0:58:57Um, I think some of the things that you were talking about is have not really been been dealt with. I'm not interested in just some of these companies making a lot of money, but I want to see the workers being able to make the money that they need, that they deserve to have.
▶ 0:59:19Um, and that this has been totally reversed in the time when, uh, we, before, um. Previously. And so if I could just turn it over now to Mr. assad. Is that correct? Yes. Yeah. Mr. uh, assad, um. >> I appreciate the. >> uh, hold on a second. Okay.
▶ 0:59:52I'm going to I'm going to enter the there with Mr. assad. Then go ahead. >> uh, Mr. schakowsky, I appreciate your priority on this. And I think you're right that workers are not just ancillary to industrial policy. They're how we do it. We can have the best technology, the best research in the world. But without the workers, we don't get there. Uh, the way I think about the a lot of the conversation centers around, do we have enough people when we talk about workforce development?
▶ 1:00:20The second part of that equation, are those jobs good? Uh, they should be good paying jobs with respectful workplaces that protect workers, right? To organize. These are all important tenets of how we think about industrial policy. These aren't just labor questions. These aren't just one off questions. They're key to our leadership in industrial policy. Um, under the chips and science under the chips manufacturing programs, the biden administration did a lot of work to encourage union engagement, to encourage project labor agreements.
▶ 1:00:48Some of those protections have been rolled back, and we're starting to see some concerning aspects to that. Um, I'll leave with the other thing I'm worried about is on workforce development. Uh, there's a number of programs that were set up that are, they're not getting the funding they deserve, including things in illinois like imec that's been doing great work to train industrial workers. Uh, the university of illinois, illinois urbana-champaign has a semiconductor workforce program. We need to continue to fund those programs.
▶ 1:01:16Those are extremely important. >> so if you want to ask another one. >> I just wanted to. Yeah, I did want to ask him a question. >> just real brief. >> you got it. You we're good. >> you're good. Okay, so let me just leave the question then, um, to, um, Mr.
▶ 1:01:38Assad, um, and, you know, to respond to, um, I mean, I just think that our workers are on the bottom line right now and the kinds of things that we should be doing to make sure that the workers are getting what they need. >> okay. I really thank the ranking member for making that point.
▶ 1:02:03Uh, the gentlelady yields back, and now we'll recognize the chairman of the full committee, Mr. guthrie, for five minutes of questioning. >> thank you, Mr. chairman, for the recognition. And, uh, first, Mr. oxman, I know we were pushed to make america great again, bring things back that have been made overseas, uh, for so long. We still have to have trade. We have to have trade in some, you know, like a third of kentucky agriculture goes overseas. So we want trade to go back and forth.
▶ 1:02:30So but why specifically in the semiconductor sim semiconductor ecosystem should the us have the leadership in this role? >> thank you, Mr. chairman. I appreciate the question. And the semiconductor is of course the backbone of technology. Uh, from the old ti calculators from your youth. Uh, I had one of those when I was in the cub scouts to, um, to the modern technology and the ai stack that we're trying to export around the world.
▶ 1:02:58It is so important to recognize that for trade purposes, that 95% of the people who live on the planet don't live in the united states, we've got 5% of the world's population. So we want everybody to enjoy the products, the services that are made in the united states and exported to the world. So I think it's enormously important, as you highlighted, for us to view trade policy as the biggest opportunity for us to ensure the success of these manufacturing efforts. Manufacturing in the united states is undergoing a renaissance.
▶ 1:03:26Uh, this administration is very focused on it, as you noted, and we have to give it time to succeed. It takes 3 to 5 years to build a semiconductor fab. It can't happen overnight. We need to build out the ecosystem that surrounds it. In the meantime, we want to make sure that things that are made in the united states are exported to the rest of the world, and trade policy can help make that happen. >> great. Thank you. So, Mr. green, um, as the us competes with china across semiconductor ecosystem, it is important we have U.S.
▶ 1:03:55Companies who are dominant in their fields, and we have sound public policies to ensure the dominance. So could you, um, in terms of intel or just in the semiconductor industry, what are the two most impactful policy changes you would like to see coming from the united states?
▶ 1:04:11>> the two biggest ones we would like to see is an extension of the ama credit, and also very specialized tariff policies that allow us to import products that cannot be made in the united states that are critical for semiconductor manufacturing here in the united states. This is a global this is a global economy, and it's a global landscape of people we're competing against. And if we're paying tariffs when other people are not, we're going to be at a competitive disadvantage in the marketplace. So it's extremely important to have both the ama credit.
▶ 1:04:38So we can do long term planning and make sure we understand what our cost structure looks like at the company level, and at the same time, make sure we're not disadvantaged from a cost perspective due to tariffs. >> so what, um, what products can you not get in the united states that are important to your. >> oh, there's most of the the. >> is it mostly rare earth or critical. >> uv equipment would be a big one coming from the netherlands, things like that. >> okay. All right. Thank you. So, uh, so Mr. oxman, again, the I, the I infrastructure boom is driving significant demand for semiconductors.
▶ 1:05:07It's the base that everything is built on. Uh, how can the us capitalize on this demand and secure its economic and societal benefits? >> uh, you're absolutely right, Mr. chairman. Ai is the future and the united states is currently in the lead. But china is quickly catching up. We know that china is engaging in a state sponsored effort to lead the ai stack around the world. They would, like the rest of the world to dominate ai.
▶ 1:05:35We have a program that the administration has put in place here in the united states, the ai export program. It's really focused on making sure that the rest of the world buys american made and american designed and american researched ai technology. That's, I think, the best effort for us. We're making it happen here at home. We're making sure that american ai is available to all consumers and businesses here, and they're benefiting from it.
▶ 1:05:57It's creating jobs, but we also want to make sure the rest of the world adopts what we like to call the american ai stack, to make sure that we can lead the world in technology as well. >> Mr. group, just with a minute. So, so, so Mr. oxford made the point. I think we talked earlier others that the in in automotive, whatever china picks an industry, we're going to put it, we're going to put the the. So you're competing against the state, uh, a major state, not just, you know, a major, major player with major resources. How did how does intel compete when they're competing with a state like china?
▶ 1:06:25And what can we do that because that's not our system. But but we need to make sure we're not in the way. What kind of things can we do to help you besides what you just said? >> yeah, the biggest thing is continue to invest in r&d, number one. Number two is to make us not have a cost disadvantage when we're doing manufacturing here in the united states. But the key thing for us is to make sure, from an r&d perspective, we're continuing to fund programs that give america leadership from semiconductor perspective that keep pushing us ahead. And those things include the tax things like we discussed and very smart tariff policy.
▶ 1:06:57>> okay, so so you're arguing we can always compete with our our brainpower and our capital to be able to do it, but we have to not put roadblocks in your way to. Correct that. Alright. Thank you. I, I only have a few seconds left, so I'll yield back. >> gentleman yields back. Now we have Mr. soto. Are you recognized. Oh I actually miss gaspar just slipped in. Uh, miss caster, you're recognized alright. She she defers to Mr. soto. They're both from florida, so. >> absolutely. >> it's a. >> day as always.
▶ 1:07:27>> yeah. And I am too, so that's fine. Uh, you're recognized for five minutes for questioning, Mr. soto. Thank you. >> Mr. chairman. Great. Nations must stay focused on the future to continue to succeed. Unfortunately, we've seen president trump's policies having us fall behind. We've already heard today about how the tariffs are raising that. >> back, for crying out loud. Go ahead. It's a joke. >> okay. >> yeah. >> all right.
▶ 1:07:56That's okay with you. >> all right. You're recognized for five minutes. >> reset the clock. >> thank you. Chairman, as I was saying, great nations have to stay focused on the future to continue to succeed. And unfortunately, we've seen president trump's policies having us fall behind his tariffs are raising prices.
▶ 1:08:19We just heard specifically about noble gases as an example, as well as as well as rare earth minerals in this industry, specifically in microchips. The iran war also raising prices and depleting valuable resources. His attacks on clean energy are helping raise prices on energy, and his failure to fully implement the chips act is holding investment back. We also see the nsf cuts are wrecking critical research for future microchips.
▶ 1:08:47We're in a competition with china, and they're not making these mistakes. They're not starting new wars. They're they're using more clean energy. They're investing more than double what we're investing $140 billion, which we've already heard today. And I don't know for the life of me why people are saying manufacturing is doing well. When 23 of the past 25 months it's been in decline. So I honestly don't know what people are talking about. It's been in decline 23 the last 25 months. That's a disaster.
▶ 1:09:14Now we have the chips and science act, which a lot of us came together on on this committee during covid with chip shortages. We even had vehicles you couldn't roll out of the lots because they had an issue with chips. So we saw 53 billion allocated and we saw some of that money come to central florida. We're proud about that with aerospace manufacturing and and microchip manufacturing in the aerospace industry happening in in neo city. That's been huge for central florida.
▶ 1:09:44Um, but we saw at the same time, several projects be cut, you know, in one of our witnesses mentioned netcast, you know, I get if you're going to cut something and say $74 billion is withdrawn, but it's been eight months and the money still hasn't been reallocated. We see this over and over again, the trump administration saying, oh, this biden administration program, it's no good. Like broadband. We're going to do it more efficient.
▶ 1:10:11Well, it's been nearly two years with the broadband still not being deployed a year and a half at least, and eight months on this. So if you're going to make something more efficient, then make it more efficient. Don't just cut a program and then not spend the money. You know, I was particularly shocked about what happened to the folks at intel. Thank you, sir, for being here today. Um, you know, having 10% of your company be taken by the us government against your will. I mean, that usually would be the definition of socialism.
▶ 1:10:39Um, how is your company handling all this stuff? And I know you have to be diplomatic, so I get all that stuff, but how are you handling the fact that now the us government is a 10% stakeholder, uh, in, in a private company? >> well, the chips act, in our view, was a bipartisan legislation. And we are very happy with the agreement that we have today. The whole goal of the program was to accelerate us based manufacturing and developing leadership products. And that's exactly what we are doing.
▶ 1:11:08We are now manufacturing in production leading edge products in new mexico and arizona. And our r&d facility in oregon has the latest euv tools. So everything that we promised to do, we're often doing and we're. >> pleased that you're doing that, sir. >> yeah. So we have not stepped off the gas and everything that we promised to get done. We are getting done.
▶ 1:11:28Um, the fact that the taxpayer is now tied to intel success helped with the commitment from the president and also made us feel like as we're successful, the taxpayer would benefit as well. So at this point we're happy with the agreement. >> very well done. You won't be in trouble with the trump administration now. I appreciate the work you're doing. Uh, then we also see this debacle with china. Trump starts a trade war. They end up not buying our soybeans then.
▶ 1:11:57Now nvidia chips are being released to china that are of a defense nature. And china's still not buying our soybeans. So, uh, you know, how do we get the balance right with china? Mr. creep, do you think, you know, there's been a lot of opinions here. What do you think as our top manufacturer of microchips, what's the right balance with china? >> well, we do believe it's about balance because we have to service a global market. 70% of what we sell does not get sold in the united states.
▶ 1:12:25So roughly 2,024% of our business does go to china. The benefit of that china sale, from our perspective, is those revenues and those margins get put back into us based manufacturing because the chips are manufactured here, and we need the scale of the global economy to be able to fill the factories that we have. >> are some of the defense nature, though, that that could put the nation in danger? Or do you not believe that. >> we don't believe any of the chips that we're selling are doing that at all? We follow all government regulations.
▶ 1:12:55>> sure. And I was more referring to the nvidia chips that were being. >> I can't speak on their deal. They have. >> I understand. Well, thank you so much and I yield back. >> gentleman yields back. You're still my friend. Uh. >> chairman I love you too. >> yeah. Okay. Alright. Wherever. Laura lee, uh, you recognize the great lady from the state of florida? You're recognized for five minutes of questioning. >> thank you, Mr. chairman.
▶ 1:13:17Uh, when it comes to semiconductors, us leadership depends not just on investment, but on protecting our intellectual property that drives innovation and ensuring that we have the workforce to sustain it. In florida, we are seeing that firsthand. Our state now has the fifth largest semiconductor workforce anywhere in the country, supported by growing partnerships between industry, universities and community colleges to build a strong talent pipeline.
▶ 1:13:46I am interested in how we can all work together to protect american innovation, compete globally and ensure that we are building the workforce needed to compete globally in the decades ahead. Mr. grebe, I'd like to come back to you. In your testimony, you emphasized that intel's competitive advantage comes in part from co-locating r&d, manufacturing and intellectual property development here in the united states.
▶ 1:14:15Given that model, what do you believe are the greatest vulnerabilities when it comes to protecting that us based semiconductor intellectual property, particularly as china is investing heavily to replicate both our design and manufacturing capabilities? >> it's a very serious issue for us. We protect our ip through both a combination of both physical and it security measures.
▶ 1:14:41We have strict access controls on sensitive locations in all of our factories, and on the it side, we limit us access to all the systems and we make sure that they're bifurcated and no one has access to all the systems. We understand that protecting the ip that we spend ten years to develop is our critical ip, and that's what makes us different. And we put the proper security measures in place to do that.
▶ 1:15:04>> you also highlighted during your earlier testimony the importance of protecting us developed prosthetic technology in our trade policy, our current us trade and export control frameworks, doing enough to prevent our adversaries from accessing or replicating intellectual property.
▶ 1:15:28>> I believe we could always do more, but at this point we continue to, like I said, secure our ip and make sure that our ip is protected, the investments the american taxpayer helps with and the investments the company makes are protected. And that's what we're spending our time and focus. >> are there things that congress could do or shifts in current existing trade policy that would be beneficial or helpful to you? >> the biggest thing from a trade policy perspective is to make sure that we have access to global markets.
▶ 1:15:53And anytime we're doing trade, we understand the impact both on how we generate our profits and where we reinvest those profits back into america by manufacturing here in the united states. >> Mr. oxman, we have heard today that the us could be facing a significant shortage of workers related to semiconductors in the coming years, particularly in technician and manufacturing roles.
▶ 1:16:18As I mentioned, in my home state, we're seeing really positive impacts of efforts such as the florida semiconductor institute working to build those integrated workforce pipelines, connecting universities, community colleges and industry to create 10,000 high wage new jobs. From your perspective, are these kinds of regional, industry driven models sufficient to meet the scale of workforce demand we're facing, or do we still need to do more? >> they're necessary, but we still need to do more.
▶ 1:16:47Congresswoman, as you highlighted, 430,000 jobs in florida created by the tech industry. It's a good start, but we still have hundreds of thousands of more openings. I had the opportunity to visit intel's facility in arizona on groundbreaking day. I was also out in arizona for a second trip to visit tsmc's new manufacturing facility. There they are creating literally tens of thousands of jobs on each site, everything from construction to maintenance.
▶ 1:17:15And they also need more skilled workers as well. We heard 115,000 openings across the fabs in the united states in the coming months. We are working as an industry to partner with community colleges, with universities and college and research facilities around the country to create the next generation of job opportunities to reskill american workers to fill those vital jobs. This renaissance in manufacturing that's taking place in the united states is exciting.
▶ 1:17:41But as you noted, we need to do a lot of work together with government, in partnership with private industry, to reskill americans to take those jobs of the future. >> do you have any thoughts on what more we could be doing in congress to make sure we're helping to effectively scale those partnerships and build them to close that gap? >> yeah, I think congress has been looking at a lot of different programs. I think the public private partnership is the area where I find the most exciting activity happening.
▶ 1:18:09Opportunities to invest in research development programs, opportunities to invest in partnership with the leading research universities in the country to invest in reskilling programs, I think are really important. The partnership between government and the private sector means that the private sector can take the lead, as it always should, in doing the education. But congress has investment in programs can really help advance them. >> thank you, Mr. chairman. I yield back. >> gentlelady yields back. Now I recognize miss castor for her five minutes of questioning.
▶ 1:18:39>> thank you, Mr. chairman. Thanks again to our witnesses. So here we are in this technological race with other countries and actors across the world when it comes to semiconductors. Um, and in the, the years following the passage of the bipartisan chips and science act, it seemed like, boy, we were gaining momentum. Uh, private industry was hiring and, and there was a strategy.
▶ 1:19:05That's why it is just a real head scratcher to, to dive into what the administration has done when it comes to our investments on semiconductors here. They, they laid off dozens of employees from the chips program office. Um, last fall, commerce secretary lutnick shut down nat caste, which was tasked with the operation of the national semiconductor technology center. The that was intended to do things that industry actors could not do on their own.
▶ 1:19:34Um, it just seems like this is self-sabotage at a time when we all really need to be working together. Um, Mr. ali, you, you yourself know, secretary actions in your testimony, can you please elaborate on the impacts of this, all of this sabotage to our what we were setting up as our, uh, grand bipartisan strategy when it came to comes to the
▶ 1:20:04Semiconductor ecosystem and what repercussions, uh, that chaos is having on, on the industry and supply chain. >> congresswoman, the, as you noted in fall of last year, uh, the commerce secretary shut down the efforts of nascar's, which was a nonprofit set up to administer many programs, including the $11 billion of r&d funding, workforce development programs. There's advanced packaging work that's happening there.
▶ 1:20:32Um, my, the, the reason it was set up the way it was was to establish an institution that had the long term foundations to be able to last and to be able to make sure that america retains the leadership that we're gaining by intel and so many other companies continuing to build in the us. That's where the manufacturing incentives come in. That's the goal of them, is for american leadership to to get back. Um, the nascar work was to sustain that leadership going forward.
▶ 1:21:00So I am really worried about that money being cut about some of the grants that have gone out. Some of them have been rescinded. Uh, it's especially worrying when we think about the long term prospects. >> so what's where do we go from here?
▶ 1:21:12What's your advice on where we go from here in, uh, have you seen the administration make any moves to to reconsider the strategy or is it is the ball in the court of the congress now to to act again and, and direct direct the administration to get their act together? >> um, so two answers.
▶ 1:21:32One, the administration has announced a different approach, a broad solicitation for funding instead of a nat caste like approach that was previously set up. >> isn't that supported by industry though? Wasn't there a lot of industry buy in? And that was the reason it was there, that. >> there was some industry buy in. My concern is the purpose of the $11 billion was to, as you stated, do what industry alone can't do. The purpose of that was to look longer term than the incentives that companies have today.
▶ 1:22:02Uh, many of these companies invest tons in r&d. The purpose of the $11 billion was not just to add to that bucket, it was to do more, to do bigger. Um, the way I think about all of that is the long term investments. And so when I think about the chips and science act as written, actually defines how that money should be spent. You all the congress appropriated that money to specific programs that should get back on track. Now, if you want to renegotiate the programs that exist in the r&d part of the law, that's something that congress can do.
▶ 1:22:32That's reasonable to do. And an administration should be able to put their preferences on the things that are in front of them that they're administrating. But we shouldn't lose sight of the goals. And I worry that we've lost sight of the goals. >> I do too. Thank you, Mr. chairman. I yield back. >> gentlelady yields back. Now recognize Mr. evans from the great state of our great state of colorado. You're recognized for five minutes. >> thank you, chairman and the ranking member. And of course, to our witnesses for taking some time today.
▶ 1:23:02Um, we've heard a lot about large scale investments from semiconductor manufacturers here today. And some of these projects are moving faster than others. And we all know that incentives are great and necessary in this space.
▶ 1:23:15But without without the proper eye to other things like permitting reform, we can't actually build the factories, we can't have the energy, we don't have the supply chain to actually create the infrastructure necessary to build semiconductors and chips here in the united states. And so a big priority of this committee and mine has been making common sense reforms and a lot of permitting reform areas. Um, one that I'm specifically working on now is the clean air act.
▶ 1:23:43Uh, actually, I have one of my bills up later this week. Um, it's bipartisan. The fire act, uh, which addresses exceptional events. So things like wildfire and how wildfire impacts air quality and air quality permitting in states like colorado, california, and arizona. So, Mr.
▶ 1:24:00Oxman, uh, first question will be to you, um, how have any or are you aware of any outdated, excuse me, outdated regulatory interpretations of the clean air act, um, that have delayed or threatened any semiconductor projects? >> uh, thank you, congressman evans, and thank you for your leadership on looking at these issues, because there there's a tendency, as you noted, to overlook these issues as important to the manufacturing ecosystem.
▶ 1:24:28And you're absolutely right to highlight the time and the energy and frankly, the wasted resources that go into complying with outdated regulations that were not intended to address the situation at hand. And the situation at hand is the construction of ai factories, which is what a lot of these data centers are, and the construction of semiconductor manufacturing capabilities, um, where the clean air act may impose permitting requirements that are very backward looking because they weren't interpreted at the time, um, in a way that advances modern
▶ 1:24:58Manufacturing. So you're absolutely right. Whether it's permitting for land use or for water use or for energy use, all of these issues need to be revisited. And your leadership on making sure that we look at these with an eye toward modern manufacturing is absolutely important to make sure that we can succeed in this renaissance of manufacturing in the united states. >> perfect. I'm glad to hear you talk about ai.
▶ 1:25:18Um, doctor wesner next question will be to you kind of in that same vein, uh, we've got to have every part of this ecosystem energy chips, infrastructure models, applications, all of these things in order to be able to succeed in building out semiconductors, chips, uh, and that manufacturing. And so while the us has some advantages and some of these space, I'm worried we're not keeping pace on energy.
▶ 1:25:42Um, and so we need policies that allows us to build and have more of that energy in the united states versus some of our national or international competitors, uh, places like china. And so can you talk about how china's supply of energy is helping them to work around layers of the ai stack and where we may be falling behind because we don't have as much available energy. >> well, certainly, sir.
▶ 1:26:10And I think your you're right that the chinese approach has some major advantages. Um, they've invested a great deal in renewables, as you know, and they, uh, they also have a great deal of coal, uh, which can be brought on stream very quickly. Uh, I think what we need to do is bring exactly what you're describing is this holistic view. What can we do to expedite the development of.
▶ 1:26:39And that gets back to our regulatory morass, uh, where you have a combination of well-intentioned efforts and if I may say, some who are classic nimbys who simply don't want us to produce energy anywhere near them. And that is a, is a structural disadvantage for us. You know, you just reflecting some of the other observations, you know, on the r&d race. Uh, I know it's your committee, but we need more funding for the national science foundation.
▶ 1:27:07Uh, not to look at butterflies, but because they're a national security agency and that's, and they need to be seen that way. This is not just academic research. Often the corners we we have work at csis, which shows, uh, the patent stream from nsf funded projects that go directly to our defense establishment and to our semiconductor companies. >> thank you. I got 25 seconds left. Mr. grebe. Did I say that right? >> yes you did. Thank you. >> just talk about ip theft.
▶ 1:27:36I used to be a us army black hawk helicopter pilot. Even if we make those chips in the united states, we know the chinese are trying to hoover up all of that information. Talk about how we can protect our ip. >> yeah. Again, we continue to protect our process ip very diligently. It is the secret sauce of how we make our money long term. And the ten year investment that we make on r&d, we have physical security controls and it security controls in all of our factories and all the products that we build.
▶ 1:28:01And we continue to test for products out in the market to make sure they're not being tampered with, that we sell them in a different market places. >> thank you. And I'm out of time. Yield back. >> thank you. I appreciate it very much, gentlemen. Yields back. Now I recognize miss clark for her five minutes of questioning. Oh, miss kelly, excuse me. Miss kelly is on the list. I'll get you next. >> mike kelly. >> thank you. Chair bilirakis and ranking member schakowsky for holding this afternoon's hearing.
▶ 1:28:30And thank you to all of our witnesses for participating. Bringing semiconductor manufacturing back to america was not an accident. Congress passed the chips and science act because we believe that strategic public investment and domestic manufacturing was essential to our national security and economic competitiveness. The early results proved that bet was right, but that investment only pays off if the funds are deployed lawfully, transparently, and in a way that delivers on the promise of making chips in america.
▶ 1:28:59Given staffing cuts at the chips program office last year, deals that have proceeded without clear legal authority and fabs still being built overseas. That is exactly what brings us here today. Mr. robinson, in your testimony, you raised concerns about the conversion of intel's chips grant to a government equity stake, stating it was done without any legal authority and without the safeguards that typically protect taxpayers.
▶ 1:29:28Can you quickly walk this committee through what those missing safeguards are and why they matter? >> thank you for your question on that. Um, I generally view equity stakes and equity investments as a tool in the industrial policy toolkit that can be useful in this particular instance. I don't think it's a good match for what we're trying to do. Let's put that aside. I also don't see the legal authorization under the chips and science act.
▶ 1:29:54Um, my view of it is when their grant was converted to an equity stake that the project milestones were clawed back. There were a number of profit sharing provisions and other things that were clawed back. That's what I worry about. I worry about the taxpayer protections that were part of the original agreement. But more than that, we don't have full transparency. Uh, it would be useful for the public to be able to see a lot more in this rather unique tool, something we haven't done in a while that requires a heightened level of accountability and transparency. >> thank you, Mr. grebe.
▶ 1:30:23Is that the. >> yes, grebe. >> grebe, do you have a response and how will you protect american taxpayers investment? >> yes, we believe the chips act was a partizan issue. Uh, we believe that the chips act was designed to accelerate semiconductor manufacturing here in the united states. Our new mexico facility that's up operational and high volume production. Today, we have an arizona leading edge, 1.8 nanometer factory in production today.
▶ 1:30:49And we have an r&d factory in oregon with the latest euv tools. And we're continuing to invest in ohio. So the whole intent of the chips act was to accelerate us based manufacturing. And that's exactly what intel is doing. And we're also 100% obligated under the law and statutory law, the chips act. >> thank you, Mr. oxman. The primary goal of the chips and science act was to onshore semiconductor manufacturing.
▶ 1:31:16However, most of the advanced semiconductor equipment necessary for these new facilities is still made by foreign companies overseas. Uh, is this administration shifting tariff policies, helping or hurting the effort to reshore american supply chains? >> well, congressman kelly, you're certainly right to highlight that supply chains for semiconductors are global, they're interdependent, and they're complex. That is absolutely the case. That's what interdependence underpins semiconductor manufacturing.
▶ 1:31:46And you're also right to highlight that in order to advance semiconductor manufacturing in the united states, american companies need access to those global supply chains. So the answer to your question is you're absolutely right. They are global supply chains. We do need access to equipment, facilities, components, ingredients, minerals from around the world.
▶ 1:32:08And we do need to make sure that our trade policy doesn't make it more expensive for american companies or for foreign direct investment in the united states by imposing additional costs above and beyond what it would cost to access those crucial ingredients outside the united states. >> so is it did you answer the question, is it helping or hurting, or are we just treading?
▶ 1:32:33>> I think it's a it's a complicated question because there are so many different policies that are intertwined. We need to make sure that our tax policies, for example, incentivize investment in not only manufacturing, but also research and design. And we're not there yet. We need to make sure that happens. We also need to make sure our trade policy not only makes it possible for investors in the united states and manufacturing to access global supply chains, but also that we can sell to the rest of the world as well. So it's trade policy is very complicated.
▶ 1:33:01There's a lot of good happening, but there's definitely more that could be done. >> thank you to all the witnesses. And I yield back. >> gentlelady yields back. Now recognize Mr. frey for his five minutes of questioning. Thanks for your patience. >> thank you, Mr. chairman. America must lead in semiconductors because chip leadership means leadership in ai, advanced manufacturing, national security. I think the list goes on and on. I think the record here makes clear that the united states still has major strengths in design, equipment and innovation.
▶ 1:33:31The goal should be to expand domestic capacity, strengthen supply chains and make sure more of the semiconductor ecosystem is built here at home. But we can't necessarily trade one policy, uh, or industry at the expense of another. We have to balance those interests for the sake of our economy, our workforce, and our global competitiveness. Um, Mr. oxman, everybody agrees ai is driving demand.
▶ 1:33:59Uh, but families in the district that I represent experience semiconductor issues through car prices, appliances, broadband equipment, electric bills. How should congress balance frontier ai goals with everyday consumer impacts? >> I appreciate the question, congressman frey, and you're absolutely right that there is a great amount of market demand for semiconductors for both logic chips and memory chips today.
▶ 1:34:27And the good news is, the renaissance and manufacturing that we've been talking about today is designed to address that, that demand. It is a marketplace need for more supply. And we're absolutely working on that across the industry. I also think it's important to note that the semiconductors that we've been talking about today, in many cases, are advanced semiconductors that are going to power the ai stack of tomorrow, but they're also foundational chips that we need to invest in more in the united states as well, that go into cars and appliances and washing machines and the like.
▶ 1:34:56And we're doing that as well. There's manufacturing happening for foundational chips at the same time. So all that to say that you're absolutely right, we do need to invest in more manufacturing capability here in the united states to address that demand to make sure consumers can access the the products and services that they want and need. >> what do you think that, uh, semiconductor resilience looks like from the perspective of a local hospital, uh, small manufacturer or a family, maybe buying a car?
▶ 1:35:24Um, not just from the perspective of a hyperscaler. What do you think that looks like? >> you're absolutely right to, to bring that up, congressman, because I think we saw during the pandemic that lack of access to semiconductors had impacts beyond what we might normally think about. We think about semiconductors, we think about mobile phones. We think about devices like laptops and pcs. But you're highlighting what really happened during the pandemic, which was auto manufacturers couldn't finish their cars. They were sitting outside the manufacturing facility. >> today and come back next month, maybe.
▶ 1:35:55>> right, because they couldn't get the chips to put in the cars. Right. So I think you're right to highlight that that really from my perspective, is, is a really important component of this discussion. It is absolutely about the chips of tomorrow. It's absolutely about powering american ai dominance, but it's also about making sure that we don't have the same problem we had during the pandemic, where we don't have the domestic supply of chips necessary to power all the other devices we need to. >> it's kind of a kind of a big deal, as they say. Um, what, sir?
▶ 1:36:22What what policy choice do you think would best help both national competitiveness and consumers at the same time? Would this be, uh, more packaging capacity, faster permitting, workforce development, grid upgrades? Like what do you think would really drive this home? >> well, those are all great ideas. I'll if I only have to pick one, I'll pick tax policy. Okay? Because I think tax policy has been enormously important to encouraging investing in the united states in manufacturing capability.
▶ 1:36:47We have the advanced manufacturing tax credit that is slated to expire at the end of this year, and that would be a disaster for manufacturers. We also need to make sure that that tax policy extends not only to the manufacturing itself, but also to the research and design that goes into semiconductors. I think that would go a long way. But you're absolutely right to highlight all those other issues. We need more investment in the electric grid. We need upgrades that can make the transmission capability available to these advanced manufacturing plants that are going in as well.
▶ 1:37:16A lot of other great work and a lot of other great ideas. >> thank you for that, Mr. grubb. Um, I'm going to is it greg or grebe? Grebe, grebe. Okay. I just don't want to butcher that. Um. >> I appreciate that. >> uh, so, sir, would you agree with that tax policy may be the most salient and. >> would if we, if we had one vote today, it would be around the imf extension going forward. >> okay.
▶ 1:37:38Um, from the perspective of um in your written testimony, you argue that america must build out more domestic ai enabled infrastructure, enabling infrastructure. What specific federal actions would accelerate that build out in your mind? >> I think the three things that we continue to come back around are the tax extension, very specialized tariff relief to import tools and equipment and chemicals that we need to build manufacturing here in the united states.
▶ 1:38:04And then an acceleration of some of the minerals getting qualified here in the united states. From the perspective right now, we're a very laborious process, a very expensive process to get new chemicals qualified here in the united states. We'd like to see that get shortened to more competitive ranges. >> appreciate that, Mr. chairman. I see my time is up, and with that, I yield back. >> I thank the gentleman. Uh, now I recognize the gentleman from the great state of new york. Miss clark, for you. And thanks for your patience for your five minutes of questioning. >> absolutely. Thank you, Mr.
▶ 1:38:35Chairman, and good afternoon to our distinguished panelists here. Uh, to our ranking member schakowsky, and to everyone for holding this very important hearing. There seems to be widespread agreement that the ability to develop semiconductors here at home is crucial to continued american leadership in the tech sector, with the vast majority of semiconductors, production based in taiwan and often under threat from china, it is is crucial that we prioritize
▶ 1:39:05Domestic production of semiconductors. This is something democrats have long understood. The bipartisan chips and science act provided billions in funding to support semiconductor production domestically. Unfortunately, the trump administration has worked to undermine this progress, seemingly out of pure pettiness.
▶ 1:39:24The attack on the chips and science act and the inconsistent policies from this administration have been a hindrance and remain a hindrance to shoring up our domestic semiconductor supply chain. The short sighted decision to attack iran has only compounded the issues the semiconductor industry is facing.
▶ 1:39:45Materials critical to the production of highly advanced chip, such as helium, sulfuric acid, aluminum, and bromine can no longer pass through the strait of hormuz. Due to the incompetence of this administration, and the damage may be felt for years to come.
▶ 1:40:03How can this administration plausibly claim that they want to onshore chip production, unleash ai development and spur workforce development when they are actively putting up unnecessary hurdles? It is simply inconsistent and, I believe, irresponsible.
▶ 1:40:19If republicans are serious about investing in the workforce and developing chips domestically, it is time to demand that this administration sticks to their word, ends the senseless war and stops undermining the chips and science act. With that, Mr. ramzan ali, thank you for being here and thank you for your thoughtful testimony and work in this space.
▶ 1:40:43What commitments could republicans in this room make today that would continue the progress of the chips and science act and bolster the domestic production of chips in the united states? >> I appreciate your focus on this issue, and thank you for that question, congresswoman. Uh, I think as a starting point, we should continue implementing the law as congress passed it.
▶ 1:41:07As you stated, it was a law that took a lot of work that for decades, american leadership and semiconductor manufacturing had declined, and a bipartisan consensus showed up because of the political realization during covid that supply chains are all intertangled, and that impacts all of us. It impacts all the things we want to buy. And so for me, committing to implementing the law as written is step one. And when that doesn't happen, congress should commit oversight. They should call people in for hearings.
▶ 1:41:35We should write letters about why the deals are changing, why commitments are changing, what are the details of a lot of these things are a little bit more opaque. Um, as I've stated, I'm also really worried about the r&d cuts. Um, both the chip's r&d cuts and the netcast, um, being changed. Uh, but as doctor westman pointed out, nsf and their, the, the president's budget for nsf is really low. That's how we maintain long term leadership is investing in research and having that kind of infrastructure.
▶ 1:42:04And then finally, because ai is driving so much of the semiconductor market and our economy, I'm worried about the systemic risks that, that, uh, that creates. So now's the time to investigate those questions. What is the kind of money that's at risk? How is the public funds? How are public funds, uh, being, being devoted to all these questions? >> very well. Unsurprisingly, this administration has taken a concerning approach to the chips and science act.
▶ 1:42:30Can you please identify the consequences we've seen in ai innovation and workforce development due to the fact that the president has disbanded netcast, erasing its existing research and development workforce efforts, and sought to rewrite existing and pending agreements with chips recipients. >> the cuts to r&d in particular, have a longer term impact. It's the kind of thing that doesn't show up immediately. We had an immediate problem.
▶ 1:43:00That's where the $39 billion in manufacturing incentives were going. But that problem doesn't go away if we don't invest in the future. So to me, the r&d investments that we were making included workforce development. We've heard a lot about the workforce shortage. That's why we needed the university of illinois that received a couple million dollars from netcast to do workforce development for semiconductor, for the semiconductor industry. Um, the shared facilities that the eu, that japan, that other places have for research.
▶ 1:43:29That's the kind of stuff that we need to do here. And that's what was planned through netcast. >> very well, Mr. chairman, I yield back. >> I thank you, gentlelady, for yielding back. And it looks like we've we don't have any other members that want to ask questions. So I want to thank the presenters today. You did an excellent job. You really did great information. So we'll continue to discuss this. It's a very important issue as you know. So thank you very much.
▶ 1:43:58I ask unanimous consent that the documents on the staff, the staff document list be submitted for the record. And, uh, without anything further without objection, the committee is adjourned.