Computing Power and Competition: Examining the Semiconductor Ecosystem.
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House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade U.S. House of Representatives
Follow its sittingsSpeaker 2
Ought to be prioritizing our workers. That's the important thing that we should be doing. And, unfortunately, I think that is not exactly what has been happening. And, I hope we can get back to that so that we can not only have the good things that we need for our people and for our workers. That's it.
What? Can we yield back? I yield back.
Speaker 1
Okay. Thank you very much. General, lady yields back. I thank her for that. And now I recognize the chairman of the full committee, Mister Guthrie, my good friend, for five minutes for an opening statement.
You're recognized.
Speaker 5
Thank you, Mr. Chairman. Thank you for convening this important hearing, and I want to thank all of our expert witnesses for being here. Semiconductors are foundational to the modern technology in our economy. From smartphones to cars and household appliances to advanced 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. Semiconductors 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 of the US semiconductor manufacturing capacity. This US semiconductor manufacturing has declined from its historical highs. While we remain leaders in design and advanced equipment, that leading edge is under pressure from strategic competitors and adversaries.
In the wake of the COVID-19 pandemic, we saw how semiconductor shortages expose the vulnerabilities in our supply chains, costing families in the economy hundreds of billions of dollars. In response, the Trump administration has taken meaningful steps to strengthen American competitiveness across the semiconductor ecosystem, helping to secure half a $1,000,000,000,000 in private investments to boost our domestic semiconductor capabilities, drive significant economic growth, and support our national security. However, we're at a critical inflection point. Our global leadership is being challenged. Our supply chains remain vulnerable, and the stakes for our economy and national security cannot be higher.
At a time when demand for semiconductors is at an all time high, we must examine the state of the semiconductor industry and want more must be done to ensure continued American leadership. And 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 technology, is the number one priority. I think you can get 435 votes, or if you said we were gonna beat China. I think I do believe in the bottom of my heart everybody wants to do that. And so we gotta figure out the right pathways to do it.
How do we do it? And it's also who controls technology. Our friend Gary Palmer, he's on the subcommittee today, always says it's not gonna 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 spec now. It's just amazing, when you look at the scale of what our industry is, this industry's become and what is becoming, and the minuscule chips and the power that they have. I remember they used to have calculators that cost $80. They just added and subtracted, and now I'm old enough to know that. And so now they don't, it's just amazing, this is 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. So there's so much more to do. And 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.
Speaker 1
Thank you, Mr. Chairman. I appreciate it. I'm old enough to remember too, those $80 calculators. Texas Instruments. I think that was the first one.
Anyway, let me go ahead and yield to my good friend, Miss Castor, who will be representing the ranking member today. I'll yield to you for 5 minutes for your opening remarks.
Speaker 6
Well, thank you, Chairman Bilaracas. Yes. Ranking member Polon is debating legislation on the floor. So if he were here, he would be offering this statement. But 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, phones, to cars, to medical equipment, and more.
They're also fundamental to artificial intelligence and the processing power to train AI systems. And 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 for everything from autos to video game consoles were disrupted. This 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. This landmark legislation provided $50,000,000,000 in funds to support domestic manufacturing and research and development of chips. As of July 2025, almost exclusively thanks to the Biden administration, the Department of Commerce had awarded about $30,000,000,000 to 19 companies in manufacturing grants for projects across the country, including in Arizona, Ohio, and New York. We should be building on that progress. But instead, the Trump administration has slashed the expert personnel dedicated to chips, has shut down NatCast, a nonprofit dedicated to distributing R and 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. Even 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 demand for chips. This 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 be 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 decisions about health, employment, and more.
We also must allow states to continue to play a role in keeping their citizens safe in the age of AI. I'm really looking forward to the expert testimony today. The congress needs your help and advice as we move forward on policy. Thank you, Mr. Chairman. I yield back the balance of my time.
Speaker 1
I thank the gentlelady. Now we'll recognize our witnesses, Mr. Jason Grab, the senior vice president of corporate planning at Intel. Thank you very much. Welcome. Mister Charles Westner, nonresident senior adviser, renewing the American innovation program, center for strategic and international studies.
Welcome. Mister Assad Ramzanali, director of AI technology policy, Vanderbilt Policy Accelerator, Vanderbilt University. Welcome. And finally, Mister Jason Oxman, president and CEO of the Information Technology Industry Council. Welcome to all of you, and we'll go ahead and begin with mister Grab.
You are recognized for five minutes.
Speaker 7
Chairman Bilirakis, ranking member Shakowsky, chairman Guthrie, and distinguished members, thank you for the opportunity to testify on the semiconductor ecosystem and its central role in artificial intelligence. Semiconductors 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 both 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. Our technology development and manufacturing is conducted in the United States using US-developed process technology and IP. We are investing more than $100,000,000,000 in new and expanded facilities in Arizona, New Mexico, Oregon, and Ohio, and have committed approximately $93,000,000,000 to domestic R and D since 2020. Colocating R and 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 extraordinary speed, driving a surge in compute demand like anything else in history.
This creates three realities. An opportunity because the US is the world's largest market for AI compute. A challenge because a single leading edge fab costs upwards of $20,000,000,000 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. The 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 gas, essential to chip manufacturing. Critical 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 is driving further US investment. The Chips Act has catalyzed more than $500,000,000,000 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 country of origin rules and duty drawback programs that incentivize global customers to buy American-made chips.
Two areas require near-term action. First, the US approval process for specialty chemicals used in advanced manufacturing is significantly slower than in Taiwan, Korea, and Japan. With EPA's task of fee authority expiring September 30, 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. Intel has committed $100,000,000 over ten years to workforce development alongside the NSF, university, and community colleges, but federal partnership through STEM education and sustained training is essential to scale.
The Chips Act has been essential to restoring US competitiveness. Intel has received 8,000,000,000 under its chips agreements, with 3,200,000,000 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 48D. Its scheduled expiration in 2026 risks slowing momentum, precisely as global competition intensifies. We urge this committee to extend the AMIC 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. This is a 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.
Speaker 1
Thank you, Mr. Greev. I appreciate it. Now doctor, Westner, you're recognized for 5 minutes.
Speaker 8
Thank you. Thank you, Mister Chairman, and Ranking Member Skolowski. And members of the committee, I appreciate the opportunity to speak with you. I am a senior adviser at the Center for Strategic and International Studies, with an appropriately named program of renewing American innovation. I have the pleasure to work with a group led by my colleague behind me, doctor Sujay Shivakumar, who has brought a vision to what we need to do to address the competitive economy that we face.
I was very pleased to hear the chairman's remarks that there's an understanding here that semiconductors are not merely another industrial sector. They're 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 identify threats and address them. And we sometimes seem to act as if they're just another industry.
But in fact, they're not, as some of the actions in the Hormuz Straits may be demonstrating today. In fact, the largest affirmation you can have, or the strongest affirmation you can have of the importance of chips, is Chinese policy. China policies, you know, you hear criticisms, old criticisms, inappropriate criticisms that we don't want to pick winners or losers. 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 an industrial policy, ask yourself what the Department of Agriculture does, what the Department of Energy does. I mean, these are institutions that provide support for critical sectors. The Chinese, on the other hand, are not reluctant to pick winners. They intend to be the winners, and they're acting like it. You know, it is great, sir, that we got $52,000,000,000 for the Chips Act.
In that same time period, the Chinese put in a 150000000000. 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. But there is a technological advance.
And one of the problems we have with our efforts to control Chinese access to our advanced technologies, to put it simply, one of the main problems is they already have it. They are 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? I mean, you may have good reasons to want to, 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. But it has to be a very targeted effort to slow, not to block. A proof of that is that Chinese firms have made substantial progress in overcoming the effects of controls in areas of semiconductor manufacturing, semiconductor manufacturing equipment, and materials.
They can produce higher nodeships very close to the leading edge. And, you know, I sometimes think when on a navy destroyer, they see an incoming missile. They really don't turn and say, ah, but that's a few nodes behind our best missiles. No. Actually, they've got a missile coming straight at them.
And that good enough strategy is what often characterizes Chinese policy. China has also been looking ahead for decades. Their hold, as you mentioned, on rares and minerals, that combined with their control of magnets, gives them a potentially decisive edge in the equipment industry, not just in chips, in the equipment industry itself. So what we need are proactive investments. We have to combine our defensive measures with a careful assessment of what their actual impacts are.
Now 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 the toughest on our own industry. With restrictions to the revenue, it'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 and D by 20%. Then we also need to pay attention to our own house. Chips are highly dependent on robust physical infrastructure, reliable electricity, as I think the whole world is beginning to understand. And it requires power generation for both traditional.
Speaker 1
I mean, doctor, you can wrap up in the next ten, twenty seconds? Because we've got to move on. Thank you.
Speaker 8
We need to invest more and recognize the effects of our policies and do what we've done in the past, which would support our industry in every way possible.
Speaker 1
Thank you very much. Good enough. Next, we have Mister Ramzanali. You recognize five minutes.
Speaker 3
Chairman Bill Rakis, ranking member Shakowski, members of the subcommittee, thank you for holding this important hearing. My name is Assad Ramzanali, 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 and D programs are being gutted.
Second, 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 2022, President Biden signed that bipartisan bill. In that law, Congress appropriated $39,000,000,000 to reshore chip manufacturing and $11,000,000,000 for R&D.
Here are some of the early signs of success on the manufacturing side. In 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. These are early signs of success, but early success requires continued government leadership.
Recent administration actions that undermine or could undermine that success that have me a little bit worried include gutting chips' 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. Turning to the $11,000,000,000 R and 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 the progress. Last year, the commerce department announced that it was dispensing with a nonprofit NAPCAST set up to administer the R and D funds and several statutorily required programs. In its place, the administration issued a broad funding solicitation.
I worry less about the specific mechanisms, but I do worry deeply that this approach might subsidize what industry is 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 and D. Stepping back on the chips act, manufacturing incentives are how the US regains global semiconductor leadership. R and D is how we sustain that leadership going forward.
Pivoting from the Chips Act, a 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 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.
One 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 is 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. Google 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.
These 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 money. Seven technology companies represent one third of the entire stock market. That's the 401k's, pensions, and life insurance plans of all of the American public. That's where I get concerned about the financial risks.
I'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 and 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 dot 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 do not have that time now.
Third, 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.
Speaker 1
Appreciate you very much. Next is Mr. Oxman. You're recognized for five minutes for your statement.
Speaker 9
Thank you, Chairman Bill Rakes. And to you and ranking member Szekowski and members of the subcommittee, grateful for the opportunity to be here with you today. My name is Jason Oxman. I'm the president and CEO of the Information Technology Industry Council, or ITI. ITI 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, ITI's 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. Chips 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. And 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 phone.
Hundreds 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, in Texas, and Ohio using quartz sand from North Carolina and specialized equipment developed in California. Expanding our competitive advantage in chips requires policies that enable companies to better compete globally and make the United States a more attractive investment destination. Since the enactment of the bipartisan Chips and Science Act, total public and private investment in the United States has exceeded $640,000,000,000, 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. Public 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 US semiconductor and AI stack leadership by doing the following six things. First, enact common sense permitting reform. We need Congress's help to speed semiconductor fab and data center construction, creating jobs and powering 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. This advanced manufacturing tax credit is a powerful incentive for semiconductor investment by American companies and also for 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. Fifth, 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, reducing investment, raising consumer costs, and making US goods less competitive globally. And finally, consult with industry on economic security policies.
ITI's members rely on transparent policymaking. That'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 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. Thank 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.
Speaker 1
Thank you very much. We appreciate it very much. I thank all of you for your testimony. Very informative. Okay.
Next, I'm gonna recognize myself for five minutes for questioning. The US is in a competition with China to dominate the semiconductor industry. How 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 Mister Greeb.
If you can be very brief, and then professor Westner, and after that, mister Oxman.
Speaker 7
Yeah. Briefly, I would say today, America and Taiwan have a leadership advantage from a technology development perspective in terms of logic chips. China does have n minus two, n minus three technology that we're developing from a lithography perspective. The biggest risk we probably have is around critical materials that come out of the 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.
Speaker 1
Very good. Thank you, professor Westner. Sir, I don't know if your mic is on. Is it on?
Speaker 8
I said I would join my colleague from Intel, with respect to the, which is generally a good idea, on semiconductors, which is particularly his point about the critical materials. 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. I think there's a strategic threat at the 28-nanometer node. We focus all our attention on the most advanced logic, but in fact, those nodes are the ones that make all our systems work, that support all our weapons. And I've learned recently that, by adjusting the equipment at the 28 node, you can actually go down to seven to five, nanometers.
Speaker 1
Alright. Thank you very much, sir. I appreciate it. I know, maybe we can elaborate a little later. Mister Oxman, please.
Speaker 9
Yes. The short answer to your question, mister chairman, is yes, China is an existential threat for two reasons. One, while we're investing $70,000,000,000 through the Chips Act in semiconductor manufacturing in the United States, China's doubling that. They're investing $140,000,000,000. And they're not just investing in semiconductor manufacturing for China.
They're investing for export to 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. We want the rest of the world to adopt the US technology stack, and the policies that Congress adopts can make that happen.
Speaker 1
Very good. Thank you very much. Okay. A New York Times story from February revealed that if the chip supply from Taiwan was cut off, it would significantly reduce US economic output beyond that of the Great Recession. Scary man.
Mister Grieve and then either or both Mister Oxman and Professor Westner, time permitting, what additionally should The United States be doing to address this substantial supply chain vulnerability? Again, we'll begin with Mister Greep.
Speaker 7
Yeah. 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, etcetera. So 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 dramatic impact on the GDP. So we hope to continue the investments in AMAC. We hope to continue the investments in R and D, and we hope to build out those nodes here in North America.
Speaker 8
I agree with the assessment of the vulnerability. And I think we also have to understand that despite lengthy search, we found no agreement with the earthquake gods who are responsible for the geology underlying Taiwan. And simply a major earthquake would eliminate a very significant part of the supply of global chips. The Chips Act was designed to address that and did. It resulted in over $500,000,000,000 in investment.
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. And we also need the plans that Intel and other companies have in the US would help a great deal to mitigate. But as it is right now, we are extremely vulnerable to geo...
Geological or geopolitical problems in Taiwan.
Speaker 1
Thank you. I wanna give you an opportunity. I'm going over Mr. Oxford briefly. Mister Oxman, can you answer that question?
Speaker 9
Yes. Mister 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. And 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.
Speaker 1
Good enough. Thank you very much. I'll yield back, and I'll recognize the ranking member of the subcommittee, Miss Shakowski, for five minutes of questioning.
Speaker 2
I would say that my major concern is that we are doing good work with hardworking workers and making sure that they are getting the kind of money that they should be getting. And I think that they are not right now. I think that what we are doing is that we have taken away the work that the hardworking people are doing. They are not getting the kind of benefits that they should be getting right now. Corporations are making more money than they have been making.
And I want to see some changes made. I think that the hardworking people who actually make sure that these products are produced, 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. What I wanna see right now is that 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 gonna ask mister.
Speaker 2
Assad some questions. But I also just like him to say, are we handling this the way that we should, which I think benefits the workers, that benefits the people who are actually doing the work, and that we are making sure that we aren't just benefiting some companies that are making more money than they need to be making right now. In fact, I think I'd like to leave right now and turn it over to mister Assad to talk about what we need to be doing here right now. I think some of the things that you were talking about have not really been dealt with. I'm not interested in just some of these companies making a lot of money, but I wanna see the workers being able to make the money that they need, that they deserve to have, and that this has been totally reversed in the time when we before previously.
And so if I could just turn it over now to Mister Assad. Is that correct? Yes. Yeah. Mister Assad.
Speaker 2
Hold on a second. Okay. I'm gonna end it there with, mister Assad then. Go ahead.
Speaker 3
Miss Schiakalski, I appreciate your priority on this, and I think you're right that workers are not just ancillary to the industrial policy. That's 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. The way I think about the a lot of the conversation centers around do we have enough people when we talk about workforce development. The second part of that equation are, those jobs good?
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 labour questions. These aren't just one-off questions. They're key to our leadership in industrial policy.
Under the chips manufacturing programs, the Biden administration did a lot of work to encourage union engagement, to encourage project labor agreements. Some of those protections have been rolled back, and we're starting to see some concerning aspects of that. I'll leave, with the other thing I'm worried about is workforce development. There's a number of programs that were set up that are not getting the funding they deserve, including things in Illinois like IMEC that's been doing great work to train industrial workers. The University of Illinois, Urbana-Champaign has a semiconductor workforce program.
We need to continue to fund those programs. Those are extremely important.
Speaker 2
We're good on questions. Okay. So let me just leave the question then to Mister Assad, and, you know, to respond to it. 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.
Speaker 1
Okay. I really thank the ranking member for making that point. The general lady yields back, and now we'll recognize the chairman of the full committee, Mister Guthrie, has five minutes of questioning.
Speaker 5
Thank you, Mr. Chairman, for the recognition. And, first, mister Roxman, I know we're pushed to make America great again, bring things back that have been made overseas for so long. We still have to have trade. We have to trade in some, you know, a third of Kentucky agriculture goes overseas, we won't trade to go back and forth. So but why specifically in the semiconductor ecosystem should the US have the leadership in this role?
Speaker 9
Thank you, Mr. Chairman. I appreciate the question. And the semiconductor is, of course, the backbone of technology, from the old TI calculators from your youth. I had one of those when I was in the Cub Scouts too, to the modern technology and the AI stack that we're trying to export around the world. It is so important to recognize that for trade purposes 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. 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 wanna 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.
Speaker 5
Okay. Thank you. So, mister Greev, as the US competes with China across the semiconductor ecosystem, it is important we have US companies who are dominant in their fields, and we have sound public policies to ensure the dominance. So could you, 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?
Speaker 7
The two biggest ones we would like to see are an extension of the AMAT 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 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 credit, so 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.
Speaker 5
So what products can you now get in the United States that are important to your?
Speaker 7
Mostly rare earth or critical? Equipment would be a big one coming from the Netherlands, things like that.
Speaker 5
Okay. Alright. Thank you. So, mister Roxman, again, the AI infrastructure boom is driving significant demand for semiconductors. It's the base that everything is built on.
How can the US capitalize on this demand and secure its economic and societal benefits?
Speaker 9
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. We 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. It's creating jobs.
But we also wanna 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.
Speaker 5
Mister Graub, just a minute. So mister Oxon made the point. I think we've talked earlier or others that and in automotive, whatever, China picks an industry. We're gonna put it. We're gonna put the so you're competing against a state, a major state, not just, you know, a major, major player with major resources.
How do Intel compete when they're competing with a state like China? And what can we do because that's not our system, 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?
Speaker 7
Yeah. The biggest thing is continue to invest in R and 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 and D perspective, we're continuing to fund programs that give America leadership from a semiconductor perspective that keep pushing us ahead. And those things include the AIMIC tax thing, like we discussed, and a very smart tariff policy.
Speaker 5
Okay. So you argue we can always compete with our brainpower and our capital to be able to do it, but we have to not put roadblocks in your way to.
Speaker 5
To do that. Alright. Thank you. I only have a few seconds left, so I'll yield back.
Speaker 1
Gentleman yields back. Now we have, mister. So to. You're recognized. Oh, actually, Miss Castor just slipped in. Miss Castor, you're all right.
She defers to mister So to. They're both from Florida.
Speaker 1
And I am too, so that's fine. You're recognized for five minutes of questioning. Mister So to.
Speaker 4
You, mister 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 rising.
Speaker 4
but it's a 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.
We just heard specifically about noble gases as an example, as well as rare earth minerals in this industry, specifically in microchips. The Iran war is 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. We're in a competition with China, they're not making these mistakes.
They're not starting new wars. They're using more clean energy. They're investing more than double what we're investing, $140,000,000,000, 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 for the last 25 months. That's a disaster. Now we have the chips and science act, which a lot of us came together on this committee. During COVID with chip shortages, we even had vehicles that couldn't roll out of the lots because they had an issue with chips. So we saw 53,000,000,000 allocated, and we saw some of that money come to Central Florida.
We're proud of that. With aerospace manufacturing and microchip manufacturing in the aerospace industry happening in Neo City. That's been huge for Central Florida. But we saw, at the same time, several projects be cut. You know?
And one of our witnesses mentioned NatCast. You know, I get if you're gonna cut something and say $74,000,000,000 is withdrawn, but it's been 8 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 gonna do it more efficiently.
Well, it's been nearly 2 years with the broadband still not being deployed, a year and a half at least, and eight months on this. So if you're gonna 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.
You know, having 10% of your company taken by the US government against your will. I mean, that usually would be the definition of socialism. 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 all handling the fact that now the US government is a 10% stakeholder in a private company?
Speaker 7
Well, the chip sack, 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 development leadership products, and that's exactly what we were doing. We are now manufacturing in production leading-edge products in New Mexico and Arizona, and our R and D facility in Oregon has the latest EUV tools. So everything that we promise to do, we're off doing. And we're pleased.
Speaker 7
Yeah. So we have not stepped off the gas, and everything that we promise to get done, we are getting done. The fact that the taxpayer is now tied to Intel's 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.
Speaker 4
Very well done. You won't be in trouble with the Trump administration now. I appreciate the work you're doing. Then we also see this debacle with China. Trump starts a trade war.
They end up not buying our soybeans. Then now NVIDIA chips are being released to China that are of a defense nature, and China's still not buying our soybeans. So, you know, how do we get the balance right with China, Mr. Creep? Do you think you know, there have been a lot of opinions here. What do you think as our top manufacturer of microchips?
What's the right balance with China?
Speaker 7
Well, we do believe it's about balance, because if we have to service the global market, 70% of what we sell does not get sold in the United States. So roughly 24% 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.
Speaker 4
Are some of a defense nature, though, that could put the nation in danger, or do you not believe that?
Speaker 7
We don't believe any of the chips that we're selling are doing that at all. We follow all government regulations.
Speaker 4
Sure. And I was more referring to the NVIDIA chips that were being released.
Speaker 1
Yeah. Okay. Alright. Well, Laura Lee, you're recognized. The great lady from the state of Florida, you're recognized for five minutes of questioning.
Speaker 11
Thank you, Mr. Chairman. 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. I 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.
Mister Grieve, I'd like to come back to you. In your testimony, you emphasized that Intel's competitive advantage comes in part from colocating R and D manufacturing and intellectual property development here in the United States. Given 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?
Speaker 7
It's a very serious issue for us. We protect our IP through a combination of both physical and IT security measures. We 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.
Speaker 11
You also highlighted during your earlier testimony the importance of protecting US-developed process tech technology in our trade policy. Are current US trade and export control frameworks doing enough to prevent our adversaries from accessing or replicating intellectual property?
Speaker 7
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 where we're spending our time and focus.
Speaker 11
Are there things that Congress could do or shifts in current existing trade policy that would be beneficial or helpful to you?
Speaker 7
The biggest thing from a trade policy perspective is to make sure that we have access to the global markets. And 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.
Speaker 11
Mister 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. As 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 college, 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?
Speaker 9
They're necessary, but we still need to do more. Congresswoman, as you highlighted, 430,000 jobs in Florida are created by the tech industry. It's a good start, but we still have hundreds of thousands 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. And they also need more skilled workers. 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, but 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.
Speaker 11
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?
Speaker 9
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. Opportunities to invest in research development programs, opportunities to invest in partnership with the leading research universities in the country, to invest in reskilling programs, 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's investment in programs can really help advance them.
Speaker 1
General Lee yields back. Now I recognize Miss Casser for her five minutes of questioning.
Speaker 6
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. And in the years following the passage of the Bipartisanships and Science Act, it seemed like, boy, we were gaining momentum. Private industry was hiring, and there was a strategy.
That's why it is just a real head scratcher to dive into what the administration has done when it comes to our investments on semiconductors here. They let off dozens of employees from the CHIPS program office. Last fall, Commerce Secretary Lutnick shut down NatCast, which was tasked with the operation of the National Semiconductor Technology Center. That was intended to do things that industry actors could not do on their own. It just seems like this is self-sabotage at a time when we all really need to be working together.
Mister Ramenzali, you yourself note secretary Lucknik's actions in your testimony. Can you please elaborate on the impacts of all of this sabotage to what we were setting up as our grand bipartisan strategy when it comes to the semiconductor ecosystem and what repercussions that chaos is having on the industry and supply chain.
Speaker 3
Congresswoman, as you noted, in fall of last year, the commerce secretary shut down the efforts of Natcast, which was a nonprofit set up to administer many programs, including the $11,000,000,000 of R and D funding, workforce development programs. There's advanced packaging work that's happening there. My 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 get back.
The NatCast work was to sustain that leadership going forward. So I am really worried about that money being cut, about some of the grants that have gone out, some of them have been rescinded. It's especially worrying when we think about the long-term prospects.
Speaker 6
So where do we go from here? What's your advice on somewhere we go from here? And have you seen the administration make any moves to reconsider strategy, or is it the ball in the court of the congress now to act again and direct the administration to get their act together?
Speaker 3
So two answers. One, the administration has announced a different approach, a broad solicitation for funding instead of a NatCast-like approach that was previously set up.
Speaker 6
Wasn't that supported by the industry, though? Wasn't there a lot of industry buy-in, and that was the reason it was.
Speaker 3
They pushed that way. There was some industry buy-in. My concern is the purpose of the $11,000,000,000 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. Many of these companies invest tons in R and D.
The purpose of the $11,000,000,000 was not just to add to that bucket. It was to do more. It was to do bigger. 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 us back on track. Now if you wanna renegotiate the programs that exist in the R and D part of the law, that's something that Congress can do. That'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 are administering. But we shouldn't lose sight of the goals, and I worry that we've lost sight of the goals.
Speaker 1
General Lee yields back. Now I recognize mister Evans from the great state of Colorado. You're recognized for five minutes.
Speaker 12
Thank you, chairman and the ranking member, and, of course, to our witnesses for taking time today. 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, but 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 in a lot of permitting reform areas. One that I'm specifically working on now is the Clean Air Act. Actually, I have one of my bills due later this week. It's bipartisan, the fire act, 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, mister Oxman, first question will be to you. How have any or are you aware of any outdated, excuse me, outdated regulatory interpretations of the Clean Air Act that have delayed or threatened any semiconductor projects?
Speaker 9
Thank you, congressman Evans, and thank you for your leadership on looking at these issues because there is a tendency, as you noted, to overlook these issues as important to the manufacturing ecosystem. And 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, where the Clean Air Act may impose permitting requirements that are very backward-looking because they weren't interpreted at the time, in a way that advances modern manufacturing. Manufacturing. 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.
Speaker 12
Perfect. I'm glad to hear you talk about AI. Doctor Wessner, next question will be to you. Kind of in that same vein, we've gotta 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, and that manufacturing. And so while The US has some advantages in some of these spaces, I'm worried we're not keeping pace on energy.
And so we need policies that allow us to build and have more of that energy in the United States versus some of our national, our international competitors, 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?
Speaker 8
Well, certainly, sir. And I think you're right that the Chinese approach has some major advantages. They've invested a great deal in renewables, as you know, and they also have a great deal of coal, which can be brought on stream very quickly. 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, and that gets back to our regulatory morass, where you have a combination of well-intentioned efforts.
And if I may say, some who are classic nimbis who simply don't want us to produce energy anywhere near them, and that is a structural disadvantage for us. You know, you just reflecting some of the other observations, you know, on the R and D race, I know it's your committee, but we need more funding for the National Science Foundation, not to look at butterflies, but because they're a national security agency. And that's they need to be seen that way. This is not just academic research off in the corners. We have work at CSIS, which shows the patent stream from NSF funded projects that go directly to our defense establishment and to our semiconductor companies.
Speaker 12
Just talk about IP theft. I 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.
Speaker 7
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 and D. We have physical security controls and IT security controls in all of our factories and in all the products that we build. And then we continue to test for products out in the market to make sure they're not being tampered with.
We sell them in different marketplaces.
Speaker 1
Thank you. Appreciate it very much, gentlemen. Yield 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.
Speaker 13
Thank you, Chair Bilaraukes and Ranking Member Shakowski, for holding this afternoon's hearing, and 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 in domestic manufacturing was essential to our national security and economic competitiveness. The early results proved that 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. Given 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. Mister Ramzanali, 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. Can you quickly walk this committee through what those missing safeguards are, and why they matter?
Speaker 3
Thank you for your question on that. 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. Put that aside, I also don't see the legal authorization under the Chips and Science Act. 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. That I worry about the taxpayer protections that were part of the original agreement. But more than that, we don't have full transparency. 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.
Speaker 13
Greb, do you have a response? And then how will you protect American taxpayers' investment?
Speaker 7
Yes. We believe the CHIPS Act was a partisan issue. 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, and we have an R and D factory in Oregon with the latest CUV tools, and we're continuing to invest in Ohio. So the whole intent of the Chips Act was to accelerate US-based manufacturing, that's exactly what Intel is doing.
And we're also 100% obligated under the law and statutory law of
Speaker 13
The Chips Act. Thank you. Mister Oxman, the primary goal of the Chips and Science Act was to onshore semiconductor manufacturing. However, most of the advanced semiconductor equipment necessary for these new facilities is still made by foreign companies. Is this administration's shifting tariff policies helping or hurting the effort to reshore American supply chains?
Speaker 9
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 independence underpins semiconductor manufacturing. And 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, and 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 have cost. Mhmm. To access those crucial ingredients outside the United States.
Speaker 13
So is it, did you answer the question? Is it helping or hurting, or are we just treading?
Speaker 9
I think 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 its trade policy is very complicated.
There's a lot of good happening, but there's definitely more that could be done.
Speaker 1
General Leah yields back. Now I recognize Mister Fry for his five minutes of questioning. Thanks for your patience.
Speaker 14
Thank you, Mr. Chairman. America must lead in semiconductors because chip leadership means leadership in AI, advanced manufacturing, and national security. I think the list goes on. I think the record here makes clear that the United States still has major strengths in design, equipment, and innovation. The 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 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. Mister Oxman, everybody agrees AI is driving demand, but families in the district that I represent experience semiconductor issues through car prices, appliances, broadband equipment, and electric bills. How should Congress balance Frontier AI goals with everyday consumer impact?
Speaker 9
I appreciate the question, Congressman Fry. And you're absolutely right that there is a great amount of market demand for semiconductors for both logic chips and memory chips today. And the good news is the renaissance and manufacturing that we've been talking about today is designed to address 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 there are 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. And we're doing that as well. There's manufacturing happening for the 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 products and services that they wanna need.
Speaker 14
What do you think that semiconductor resilience looks like from the perspective of a local hospital, a small manufacturer, or a family maybe buying a car, not just from the perspective of a hyperscaler? What do you think that looks like?
Speaker 9
You're absolutely right 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, yeah. The manufacturing facility.
Speaker 9
Right. Because they couldn't get the chips put in the cars. Right. So I think you're right to highlight that that really, from my perspective, 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.
Speaker 14
Yeah. It's kind of a big deal, as they say. What, sir, what policy choice do you think would best help both national competitiveness and consumers at the same time? Would this be more packaging capacity, faster permitting, workforce development, grid upgrades? Like, do you think would really drive this home?
Speaker 9
Well, those are all great ideas. If I only have to pick one, I'll pick tax policy. Okay. Because I think tax policy has been enormously important to encouraging investment in the United States in manufacturing capability. We 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 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.
A lot of other great work and a lot of other great ideas.
Speaker 14
So, sir, would you agree with that tax policy, maybe the most salient in all?
Speaker 7
If we had one vote today, it would be around the AMIC extension going forward.
Speaker 14
Okay. From the perspective of, in your written testimony, you argue that America must build out more domestic AI-enabled infrastructure. What specific federal actions would accelerate that build-out in your mind?
Speaker 7
I think the three things that we continue to come back around are AIMIC tax extension, very specialized tariff relief to import tools and equipment and chemicals that we need to build manufacturing here in The United States, and then an acceleration of some of the minerals getting qualified here in The United States from the TASCA perspective. Right now, we're a very laborious process and 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.
Speaker 14
Appreciate that, Mr. Chairman. I see my time is up, and with that, I yield back.
Speaker 1
I thank you, gentlemen. Now I recognize the gentlewoman from the great state of New York, Miss Clark, and thanks for your patience for your five minutes of questioning.
Speaker 10
Absolutely. Thank you, mister chairman, and good afternoon to our distinguished panelists here, to our ranking member, Tchaikowski, 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 crucial that we prioritize domestic 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. The 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 shortsighted decision to attack Iran has only compounded the issues the semiconductor industry is facing. Materials 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.
How 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. If Republicans are serious about investing in the workforce and developing chips domestically, it is time to demand that this administration sticks to their work, ends the senseless war, and stops undermining the Chips and Science Act. With that, Mister Ramzanali, thank you for being here, and thank you for your thoughtful testimony and work in this space. What 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?
Speaker 3
I appreciate your focus on this issue, and thank you for that question, congresswoman. I think as a starting point, we should continue implementing the law as Congress passed it. As 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. We should write letters about why the deals are changing, why the commitments are changing. What are the details of a lot of these things? They're a little more opaque.
As I've stated, I'm also really worried about the R and D cuts. Both the chips r and d cuts and the nat cast, being changed. But as doctor Western pointed out, NSF and their 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. And then finally, because AI is driving so much of the semiconductor market and our economy, I'm worried about the systemic risks that that point creates.
And so now's the time to investigate those questions. What is the kind of money that's at risk? How are public funds being devoted to all these questions?
Speaker 10
Very well. Unsurprisingly, this administration has taken a concerning approach to the Chips and Science Act. Can you please identify the consequences we've seen in AI innovation and workforce development due to the fact that the president has disbanded Natcast, erasing its existing research and development workforce efforts, and sought to rewrite existing and pending agreements with CHIP's recipients.
Speaker 3
The cuts to R and 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. That's where the $39,000,000,000 of manufacturing incentives were going. But that problem doesn't go away if we do not invest in the future.
So to me, the R and 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 Natcast to do workforce development for the semiconductor industry. The shared facilities that the EU, that Japan, that other places have for research, that's the kind of stuff that we need to do here, and that's what was planned through NatCast.
Speaker 1
I thank you, gentle lady, for yielding back. And, it looks like we don't have any other members that wanna ask questions, so I wanna 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. I ask unanimous consent that the documents on the staff, this document list, be submitted for the record. And, without anything further, without objection, the committee is adjourned.
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