“Chips and Science” Act is Big on Jobs, Slim on Training

The recently-passed bill aims to boost the U.S. semiconductor industry by providing subsidies for new chip factories, R&D, and some workforce training.

President Biden is set to sign the “Chips and Science” act, which will provide billions in government subsidies for the U.S. semiconductor industry and is expected to spur major investment and job growth in the field.

The act, passed in bipartisan votes by both the U.S. House and Senate, provides about $52 billion in government subsidies and an investment tax credit worth about $24 billion.

  • $39 billion would give direct financial assistance to companies to build chip manufacturing plants domestically.
  • A separate $11 billion is for chip manufacturing research and workforce training, and $2 billion for military innovation.

Senator Mark Warner of Virginia told Reuters the bill would help fund 10 to 15 new semiconductor factories.

  • In doing so, it’s expected to create more than a million construction jobs over the next five years.
  • Direct employment in the semiconductor sector will also need to grow by about 90,000 workers over the next three years. The industry currently employs more than 277,000 workers in the United States.

States with a large semiconductor industry presence, including Oregon, Ohio, and Indiana, are poised to see even more concentrated growth. In Ohio, for example, Intel had already committed $20 billion to build and staff a new chip manufacturing plant, including $100 million in education and training for the workers it will need. The company now stands to increase its investment in the state five-fold, to $100 billion—creating what it is calling the “silicon heartland.”

The largest number of jobs in Ohio and elsewhere across the country will be operators and technicians, but there will also be a significant need for engineers and researchers, says Peter Bermel, a microelectronics expert at Purdue University who has been closely following the legislation.

New jobs, but who will fill them?

To help train new workers, the act gives the National Science Foundation $200 million to support the development of the microelectronics workforce.

But few other dedicated training dollars made it into the final bill—including the much-anticipated renewal of the Trade Adjustment Assistance for Workers program, which will now need to find a home in other legislation. The program, which provides about 100,000 Americans with retraining and other benefits each year, lapsed in July.

Construction projects across the country are already experiencing delays amid a shortage of skilled workers, even before the new factory-building incentives and all the spending from the infrastructure bill takes full effect. Semiconductor manufacturing technicians and operators are also already in short supply.

In Oregon this past year, Intel has been so pressed for workers that it has taken to hiring people before they finish their training programs and to advertising on Sunday Night Football.

“It seems like every other week I get a call that says, ‘I could hire 100 people right now,’” Eric Kirchner, chairman of the microelectronics department at Portland Community College, told The Oregonian last fall.

Ramping up training

The details: Most of the training funds in the Chips and Science bill will be coming through the NSF, and perhaps the Department of Commerce down the road.

Bermel says the NSF might route the $200 million in workforce funding through existing award programs, such as the Regional Innovation Engines and Future of Semiconductors initiatives. Or it could set up a separate program.

  • He hopes that the SCALE workforce development program, which he leads, serves as a model. The program, funded by the Department of Defense, includes a wide range of 4-year universities and currently serves almost 300 students nationwide.
  • Bermel sees particular promise in expanding the program to K-12 and community colleges, and the partners already have concepts in the works.

“Following our existing model could be an efficient use of resources that leverages the lessons we’ve learned, while leveraging recent investments in this area,” he says.

The kicker: More broadly, Bermel says, the Chips and Science act requires a workforce development plan to be integrated into research and development programs funded by the Department of Commerce.

That integration is key, he says, and “provides an important opportunity to address critical shortages in workforce capabilities.”

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