[Senate Hearing 117-837]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 117-837

          DEVELOPING NEXT GENERATION TECHNOLOGY FOR INNOVATION

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________


                             MARCH 23, 2022

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation








                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]








                Available online: http://www.govinfo.gov
                
                               ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

54-772 PDF                WASHINGTON : 2024














       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                   MARIA CANTWELL, Washington, Chair

AMY KLOBUCHAR, Minnesota             ROGER WICKER, Mississippi, Ranking
RICHARD BLUMENTHAL, Connecticut      JOHN THUNE, South Dakota
BRIAN SCHATZ, Hawaii                 ROY BLUNT, Missouri
EDWARD MARKEY, Massachusetts         TED CRUZ, Texas
GARY PETERS, Michigan                DEB FISCHER, Nebraska
TAMMY BALDWIN, Wisconsin             JERRY MORAN, Kansas
TAMMY DUCKWORTH, Illinois            DAN SULLIVAN, Alaska
JON TESTER, Montana                  MARSHA BLACKBURN, Tennessee
KYRSTEN SINEMA, Arizona              TODD YOUNG, Indiana
JACKY ROSEN, Nevada                  MIKE LEE, Utah
BEN RAY LUJAN, New Mexico            RON JOHNSON, Wisconsin
JOHN HICKENLOOPER, Colorado          SHELLEY MOORE CAPITO, West 
RAPHAEL WARNOCK, Georgia                 Virginia
                                     RICK SCOTT, Florida
                                     CYNTHIA LUMMIS, Wyoming

                       Lila Helms, Staff Director
                 Melissa Porter, Deputy Staff Director
       George Greenwell, Policy Coordinator and Security Manager
                 John Keast, Republican Staff Director
            Crystal Tully, Republican Deputy Staff Director
                      Steven Wall, General Counsel








                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 23, 2022...................................     1
Statement of Senator Cantwell....................................     1
Statement of Senator Wicker......................................     4
Statement of Senator Johnson.....................................    30
Statement of Senator Moran.......................................    36
Statement of Senator Markey......................................    38
Statement of Senator Scott.......................................    40
Statement of Senator Klobuchar...................................    42
Statement of Senator Thune.......................................    44
Statement of Senator Baldwin.....................................    46
Statement of Senator Warnock.....................................    48
Statement of Senator Peters......................................    50
Statement of Senator Rosen.......................................    52
Statement of Senator Young.......................................    54
Statement of Senator Hickenlooper................................    56
Statement of Senator Sinema......................................    58

                               Witnesses

Hon. Ron Wyden, U.S. Senator from Oregon.........................     5
Pat Gelsinger, Chief Executive Officer, Intel Corporation........     6
    Prepared statement...........................................     8
Sanjay Mehrotra, Chief Executive Officer, Micron.................    16
    Prepared statement...........................................    18
Preston Feight, Chief Executive Officer, PACCAR Inc..............    21
    Prepared statement...........................................    23
Tim Archer, President and Chief Executive Officer, Lam Research 
  Corporation....................................................    24
    Prepared statement...........................................    26

                                Appendix

Response to written questions submitted to Pat Gelsinger by:
    Hon. Ray Ben Lujan...........................................    65
    Hon. Maria Cantwell..........................................    67
    Hon. Tammy Duckworth.........................................    70
    Hon. Amy Klobuchar...........................................    71
    Hon. Marsha Blackburn........................................    72
    Hon. Rick Scott..............................................    76
    Hon. Shelley Moore Capito....................................    77
Response to written questions submitted to Sanjay Mehrotra by:
    Hon. Marsha Blackburn........................................    79
    Hon. Rick Scott..............................................    81
    Hon. Shelley Moore Capito....................................    82
Response to written questions submitted to Tim Archer by:
    Hon. Marsha Blackburn........................................    84
    Hon. Rick Scott..............................................    85
    Hon. Shelley Moore Capito....................................    85









 
          DEVELOPING NEXT GENERATION TECHNOLOGY FOR INNOVATION

                              ----------                              


                       WEDNESDAY, MARCH 23, 2022

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:03 a.m., in 
room SR-253, Russell Senate Office Building, Hon. Maria 
Cantwell, Chairwoman of the Committee, presiding.
    Present: Senators Cantwell [presiding], Klobuchar, Markey, 
Peters, Baldwin, Tester, Sinema, Rosen, Hickenlooper, Warnock, 
Wicker, Thune, Moran, Young, Johnson, and Scott.
    Also present: Senator Wyden.

           OPENING STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    The Chair. The Senate Committee on Commerce, Science, and 
Transportation will come to order. We are here this morning to 
talk about ``Developing Next Generation Technology for 
Innovation.'' We are joined by a distinguished panel of 
manufacturers, and people who use this product as a critical 
part of our supply chain, and we welcome all of them who are 
with us today.
    One witness joining us virtually from PACCAR, Mr. Preston 
Feight, and we very much appreciate him being able to join us. 
We are also going to be joined by one of our colleagues who 
wishes to make a statement. And I will allow him to do that 
following Senator Wicker and I.
    The semiconductor industry is definitely a uniquely 
American story. It has shown the importance of innovation and 
building in the United States. The first transistor was 
demonstrated in New Jersey in 1947. In 1958, Jack Kilby, a 
Missourian working at Texas Instruments, attended college on 
the GI Bill, and demonstrated the first integrated circuit.
    The semiconductor industry, with the benefit of Federal 
purchasing power, and Federal R&D, helped us to get to the 
Moon, it has helped us build our security leadership, and has 
launched the Information Age economy.
    So I am pleased that the United States has played such a 
leadership role. But when it comes to manufacturing today, here 
in the United States, we are falling behind. Semiconductors 
underpin nearly every aspect of our national and economic 
security, and yet we are short on the amount of advanced logic 
chips building at scale here in the United States of America. 
That has to change.
    In fact, over 90 percent of the most advanced chips come 
from one island in the Pacific Ocean, Taiwan. I believe in 
global trade, but I also believe that chip security is as 
important as food security. That is why we need to continue to 
demonstrate leadership, and make investments in R&D, as the 
USICA Bill, that this committee worked so hard to get out last 
year, showed.
    Our over-reliance on vulnerable global supply chains, 
without having a U.S. alternative ready to go, is an economic 
and national security risk. It is a lesson we have already 
learned and we need to change directions.
    With the automotive sector, thousands of Americans have 
worked and endured layoffs and shortages. The global automotive 
industry suffered over $200 billion in losses, and Ford was 
forced to halt or cut production at least eight plants of 
recent months.
    The cost of a used car: I wanted to show this chart. The 
cost of a used car--I don't know where you could show that, 
sorry.
    [The information referred to follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    The Chair. The cost of a used car has gone up 41 percent, 
and new cars 12 percent, a lot of this is due to the 
semiconductor shortage. Let me repeat that. The cost of a used 
car has gone up 40 percent.
    Now, why would that be? Used cars already have the 
electronics. It is because if you want to buy a new car right 
now you are probably going to have to wait because the car 
companies don't have enough semiconductors.
    People who can easily afford a new car, and need one but 
can't get one due to the shortage, are instead buying the used 
cars, and that is driving up the price. So anyone knows that 
the people who can afford to wait the extra 6 months for the 
new car probably aren't the people who are really feeling the 
pain.
    It is the person whose radiator blew out last week and just 
needs anything on four wheels to get them to their job. And 
that is a basic used car that might have gone up $5,000 in 
costs, an additional 41 percent. And an extra $2,000 taking 
that to $7,000 is just a trip the family doesn't get to take, 
or maybe next month's rent that can't get paid. So the impacts 
of this are really affecting American consumers.
    Our national security front, EUROPOL just reported this 
month that counterfeiters are trying to exploit the 
semiconductor shortage by introducing fake chips into the 
market, raising the chances that critical infrastructure and 
defense systems could be compromised. The shortage is also a 
setback for our efforts to remove foreign telecommunications 
electronics that could be compromised by backdoors from other 
governments.
    According to the telecommunications industry, wait times 
for some networking equipment is now at 50 weeks. The cost of 
some networking equipment has risen 12 percent, and price 
gougers are selling chips for a hundred times their regular 
price. That is no way to build out the access to our broadband.
    In addition, we know that relying heavily on one country, 
and largely one company creates a lot of targets for hackers. 
Eighteen months ago, security researchers found hacking 
campaigns that compromised at least seven Taiwanese chip 
manufacturers to steal semiconductor chip designs.
    All of these are reasons why we need to get USICA done, and 
make sure that we get to conference with our colleagues. These 
bills have $2 billion investments specifically for our 
Department of Defense, to secure the microelectronics supply 
chain required for our national security missions.
    The shortages that we have today, if we don't address them, 
are going to continue well into the future. That is because the 
world needs one trillion chips to be produced, actually that 
was in 2018, in 2021 we need 1.2 trillion chips basically 
produced every year. In 2031, that will be 2 trillion chips per 
year.
    So our current foundries are already working overtime. 
Building new foundries has to be part of the long-term 
solution, and we need to send that price signal today. If we do 
nothing, these shortages are just an example of what is to 
come. I know we are going to hear from PACCAR who is going to 
tell us about how every aspect of freight is being affected, 
even if it is not a high-tech product, if you don't have trucks 
to move the products in our supply chain, because you don't 
have enough trucks, then we are affecting every aspect of the 
supply chain.
    So clearly we are here to talk about the next generation of 
chips, and how the United States keeps its leadership in 
advanced manufacturing.
    That is why, Mr. Archer, we are obviously going to hear 
from you as well on lithography, and how important it is for 
the United States to stay ahead.
    But we are so happy to be joined by the witnesses today. It 
is 288 days since the Senate passed this USICA Bill. It is now 
time for us not to wait another day, but to get this done, and 
keep America's leadership going in the right direction.
    With that, I turn to my Ranking Member, Senator Wicker.

                STATEMENT OF HON. ROGER WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Here, here. Thank you, Madam Chair. And 
good morning. Today's hearing on semiconductors could not be 
more opportune, and I dare say there is not a more important 
hearing anywhere on Capitol Hill this morning.
    The COVID-19 pandemic exposed the fragility of the supply 
chains we depend on for public health, national security, and 
economic prosperity. Semiconductors are the life blood of 
modern industrial production, and the chip shortage over the 
past two years has caused and made worse many of our supply 
chain disruptions.
    Today's witnesses play key roles in the broader 
semiconductor ecosystem, which includes equipment 
manufacturers, chip producers, and industries that consume 
large quantities of chips.
    I would like to extend a special welcome across the sea to 
Preston Feight, CEO of PACCAR, a company that is very important 
to Senator Cantwell and me. For over a decade the PACCAR 
facility in Columbus, Mississippi, has produced hundreds of 
thousands of world-class engines for heavy trucks, and provided 
good-paying jobs for a talented and motivated workforce.
    I hope Mr. Feight and our other witnesses can give the 
Committee a sense of the impacts posed by the chip shortage on 
their businesses, their workers, and America's global 
competitiveness. Although semiconductors have become vastly 
more important to global commerce, the United States has, for 
decades, neglected the industry. America's share of global 
semiconductor manufacturing has fallen from nearly 40 percent 
in 1990, to about 12 percent today.
    Foreign governments, including China, seized on the lack of 
U.S. leadership in this area, and, as a result, we are now 
entirely dependent on foreign production of the most cutting-
edge chip technology. Chip production, R&D, innovation, and 
high-paying jobs all went overseas, leaving us dangerously 
exposed.
    The Committee would benefit from our witnesses' 
perspectives on how we got to this situation, and specifically, 
why other countries have displaced the United States as the 
center of gravity in semiconductors. The good news is that 
Congress has an opportunity to restore American leadership in 
semiconductors, in both the short and long run.
    I am hopeful that the House and Senate leaders will soon 
come together in conference committee to reconcile the 
differences between the Senate-passed U.S. Innovation and 
Competition Act, USICA, and the House-passed America COMPETES 
Act. Both bills include the CHIPS Act, which would provide tens 
of billions of dollars to incentivize domestic chip 
manufacturing, stabilize the semiconductor supply chain, and 
make long-term investments in R&D.
    For our part, Senator Cantwell and I helped shepherd USICA 
to passage in the Senate by a 68 to 32 vote last summer. We are 
ready to go, and as the Chair indicated, I am confident that a 
fair conference process will produce landmark legislation to 
keep America ahead of the pack in R&D and innovation. I would 
also ask our witnesses to comment on the importance of the 
CHIPS Act and what it would mean for their businesses.
    Vladimir Putin's illegal war on Ukraine has shown what can 
happen when we rely on dictators to maintain economic 
stability. Russia's criminal war of aggression has exposed 
long-term dependencies, and sent the prices for gas, wheat, and 
industrial metals soaring.
    Unfortunately, Russia is not the only strategic competitor 
with designs on other countries. China has also demonstrated 
aggressive behavior toward Taiwan, and stated its intent to 
challenge Taiwan's sovereignty and independence. Taiwan now 
accounts for 92 percent of the world's most advanced 
semiconductor manufacturing capacity.
    Think of the consequences if China were to invade our 
Taiwanese partner. Let us keep that scenario in mind, as 
Congress continues its critical work of restoring American 
leadership in this vital industry.
    Thank you, Senator Cantwell.
    The Chair. Thank you, Senator Wicker. I also agree with 
your statement, so you and I are on the same page, and 
hopefully we are going to get our colleagues on the same page.
    We have been joined by the Chairman of the Finance 
Committee, Senator Wyden, who has played a leadership role in 
CHIP legislation, and is here to introduce one of our 
witnesses.
    Senator Wyden, welcome to the Commerce Committee, a 
committee that you served on for quite some time, but still 
keep very close tabs on you, and you keep very close tabs on 
us, particularly when it comes to privacy legislation. So thank 
you for being here.

                 STATEMENT OF HON. RON WYDEN, 
                    U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Chair Cantwell, and Ranking 
Member Wicker, both for your important remarks, and for the 
chance to be able to introduce the CEO of Intel, Mr. Pat 
Gelsinger.
    And as Senator Cantwell noted, I am a proud alum of the 
Commerce Committee. And Senator Wicker, I also recall that 
brevity is appreciated for the cause. And I will be brief.
    It has been nearly 50 years since Intel's first investment 
in my home state of Oregon, and the company Pat Gelsinger leads 
is now my home state's largest private employer, upwards of 
20,000 Oregonians work at Intel. These colleagues are good-
paying jobs that not only add to our state's economic vibrancy, 
they help to keep Oregon and our country at the forefront of 
tech leadership around the world.
    A little over a year ago, Pat returned to Intel where he 
spent three decades earlier in his career. He and I have had 
many discussions about what chip manufacturing means to Oregon, 
and the entire country.
    From the time the typical American gets up in the morning, 
to when they go to bed at night, and sometimes even while they 
are sleeping, they interact with thousands of semiconductors. 
Congress is finally waking up to the fact that computer chips 
are the beating heart of the 21st century economy. The pandemic 
era breakdowns in semiconductor supply chains made it very 
clear how essential chips are to the health of our economy and 
our everyday lives.
    With that understanding, there is a big bipartisan interest 
in supporting a domestic, a vibrant domestic chip manufacturing 
sector. Under Pat's leadership, Intel is stepping up. Intel has 
committed to continued investments in Oregon, and committed to 
putting billions of dollars of their money to build new 
manufacturing capacity in the United States.
    Now, as you both have noted, the Congress has got to step 
up, and do its part to launch America's chip manufacturing 
revival. There is a big opportunity ahead of us to build a more 
resilient economy and create many thousands of high skill, 
high-wage jobs in our country. Pat and his team at Intel are 
going to be at the forefront of the effort.
    Let me close with this. If Congress fails to do its part, 
you both have made it clear, our country is going to pay 
dearly. That is why failure here is unacceptable, and it is 
important to recognize that this is the beginning of a much 
larger effort.
    Everybody up here has got a busy schedule, so thank you for 
giving me the chance to introduce Pat Gelsinger, CEO of 
Oregon's largest private employer. And I appreciate the chance 
that he will have to describe what his company's work is all 
about, and why it is so critical to my home state of Oregon, 
and our country's economic future.
    The Chair. Thank you, Senator Wyden. And again, we know how 
busy everybody's schedule is today. We appreciate it, and I am 
sure our witnesses do, and particularly Mr. Gelsinger.
    So with that, Mr. Gelsinger, please start us off.

  STATEMENT OF PAT GELSINGER, CHIEF EXECUTIVE OFFICER, INTEL 
                          CORPORATION

    Mr. Gelsinger. Thank you. And good morning, Chair Cantwell, 
Ranking Member Wicker; and Senator Wyden, thank you for that 
most kind introduction; and to the members of the Committee, 
thank you for the opportunity to speak with you today, and for 
your support for funding the CHIPS for America Act.
    Every aspect of human existence is becoming digital, and 
everything digital runs on semiconductors. We provided you 
samples of some show and tell, right. You know, our most-
advanced, high performance computing components. The latest 
generation of 7 nanometer server, and client products, and the 
first-ever samples of our 4 nanometer next-generation client 
product as well.
    This is what we are talking about today. The most advanced 
components on Earth. Semiconductors are the foundation for 
technologies, including artificial intelligence, 5G, autonomous 
vehicles, and IoT. Our economic and national security are 
dependent on semiconductors, digital transformation has led to 
unprecedented demand for chips, made more acute by the COVID 
pandemic, and disruptions in our global supply chain.
    The chip shortage cost the U.S. economy $240 billion last 
year. We now expect the shortage will continue into at least 
2024. America showed leadership when Congress passed the CHIPS 
Act, but the situation has grown even more serious since then, 
and the supply chain shortage is truly global.
    While the EU began its work on their CHIPS Act, a year 
later than Congress, I am expecting EU funding will be made 
available this year. Similarly, other governments are 
aggressively offering significant incentives to semiconductor 
companies like ours, to build fabs on their shores.
    Senators, we must look beyond short-term capacity, and 
recognize what U.S. chip leadership truly entails, with four 
areas of focus: Incentivize manufacturing on U.S. soil. Second, 
supercharge research and development. Third, address the skills 
gap. And fourth, enhance our national defense.
    When it comes to manufacturing, the world needs 
geographically-balanced resilient supply chains. In 1990, 80 
percent of semiconductors were built in the U.S. and Europe. 
Today 80 percent is in Asia, with only 12 percent in the U.S., 
and half of that being Intel.
    Asian countries moved aggressively to attract this industry 
with strong incentives sent to policies. As a result the 
operating cost to manufacture in East Asia is 30 to 50 percent 
cheaper compared to the U.S. This is particularly significant 
for an investment of this scale. A modern, advanced, 
semiconductor fab costs $10 billion to build and equip.
    Global semiconductor demand is projected to double by the 
end of the decade to $1 trillion. Currently only the United 
States, South Korea, and Taiwan can manufacture the leading-
edge chips that power everything from your computer, to the 
Joint Strike Fighter.
    For our entire 53-year history as a company, we have 
performed the majority of our R&D and manufacturing in the U.S. 
We have put our chips on the table to help the U.S. regain 
process technology and manufacturing leadership. In the last 
year alone, Intel has announced over $43 billion of U.S. 
manufacturing investments with expansions in New Mexico, two 
new fabs in Arizona, and our landmark Ohio investment.
    Our initial hub in Ohio will establish the first advanced 
semiconductor in the Midwest. From the company that help create 
Silicon Valley, we are now creating the Silicon Heartland.
    At full build out, assuming we receive support from the 
CHIPS Act, the total investment from this site could grow to as 
much as $100 billion over the next decade. We have also thrown 
our factory doors open wide to provide capacity for U.S. and 
global foundry companies. We seek rebuild the entire supply 
chain on U.S. soil.
    Intel is one of the world's top R&D spenders. In 2021 we 
invested more than $15 billion in R&D. Intel strongly supports 
the creation of the National Semiconductor Technology Center, 
or NSTC, and the National Advanced Packaging Manufacturing 
Program, through the CHIPS Act.
    I also implore Congress to restore the ability to fully 
deduct R&D expenses, a policy that has been in place for 
decades. These research partnerships and the restored R&D 
deduction will continue to drive a lab-to-fab pipeline. Our 
workforce consists of well-paying jobs across the spectrum of 
construction, skilled manufacturing and research. Increasing 
access to STEM education is essential for building a talented, 
diverse pipeline of future technologists.
    Intel detailed just last week our plans to invest $100 
million over the next decade, in partnership with community 
colleges, universities, and the U.S. NSF.
    Last, building up of U.S. commercial capacity is essential 
for defense and national security. We seek to have vibrant 
world-leading commercial capacity that could be leveraged for 
the additional requirements of defense and intelligence. 
Further, we encourage a strong and increasing partnership with 
the EU to meet our mutual global needs. Almost all of the 
critical technologies and semiconductor equipment and 
manufacturing, are in the U.S. or in the EU.
    I want to thank you for this opportunity to testify today, 
for the Committee's support of the CHIPS Act. We are slated to 
break ground in Ohio this year. I challenge Congress to find a 
path forward on CHIPS Act funding before then. I want to go 
bigger and faster.
    Thank you very much. I look forward to your questions.
    [The prepared statement of Mr. Gelsinger follows:]

     Prepared Statement of Pat Gelsinger, Chief Executive Officer, 
                           Intel Corporation
    Chair Cantwell, Ranking Member Wicker, and members of the 
Committee, thank you for inviting me to testify to share my perspective 
on the importance of advanced semiconductor manufacturing, research and 
development (R&D), and workforce in the United States, and the urgent 
need to fund the CHIPS for America Act (CHIPS Act). I am the Chief 
Executive Officer of Intel Corporation, a global leader in 
semiconductor technology and manufacturing, and the only U.S. 
semiconductor company with the depth and breadth of intelligent 
silicon, platform, software, architecture, design, manufacturing, 
packaging, and scale, as well as innovation and leading-edge 
manufacturing capabilities here in the United States. There is an 
urgent need for the Federal government to incentivize more private 
sector investment in the United States to enable a resilient and 
innovative semiconductor ecosystem, and I thank the Chair and Ranking 
Member, along with Senators Schumer, Cornyn, and Young, for their 
support in advancing legislation to fund the CHIPS Act.
Background
    Intel Corporation is one of the world's largest semiconductor 
manufacturers, employing over 120,000 people globally, including over 
55,000 in the United States. We are headquartered in Santa Clara, 
California, and have manufacturing and R&D facilities in Oregon, 
Arizona, California, New Mexico, Texas, Massachusetts, and--once 
construction is complete--in Ohio. Intel is the top employer and a 
major part of the community in every city where we manufacture:

   In California, our total annual economic impact is 
        approximately $24.9 billion, based on 2019 data. We have 
        donated nearly $90 million to support California schools and 
        nonprofits and we employ nearly 14,600 full time equivalents 
        (FTEs) as of January 2020.

   In Oregon, our total annual economic impact is approximately 
        $19.3 billion, based on 2019 data. We are Oregon's largest 
        corporate employer with nearly 21,000 FTEs as of January 2021, 
        and we've also invested more than $49 billion ain capital to 
        support our operations in the state.

   In Arizona, our annual economic impact is approximately $8.6 
        billion, based on 2019 data. We've invested more than $23 
        billion in capital to support our operations in the state and 
        we employ nearly 12,000 FTEs there as of January 2021.

   In New Mexico, our annual economic impact in New Mexico is 
        approximately $1.2 billion, based on 2019 data. We've also 
        invested more than $16.3 billion in capital to support our 
        operations in the state and employ approximately 1,800 FTEs 
        there.

   In Texas, as of February 2021, close to 1,800 FTEs support 
        innovations in cloud computing, Internet of Things, 5G 
        connectivity, memory and programmable solutions.

   In Massachusetts, as of February 2021, the 900 FTEs at our 
        research and development center are focused on advanced 
        semiconductor technology, embedding intelligence in the cloud, 
        network, edge, and myriad computing devices to transform 
        business and society.

    Intel is one of only three semiconductor manufacturers in the world 
making advanced logic chips and the only one with the majority of its 
R&D and intellectual property in the United States. As an integrated 
device manufacturer (IDM), Intel is the only company in the United 
States that can do both leading-edge design and manufacturing in-house. 
This capability has been foundational to our success, enabling product 
optimization, improved economics, and supply chain resilience. The 
semiconductor products that Intel manufactures provide the foundations 
for technologies ranging from personal computing, cloud computing, 
artificial intelligence (AI), Internet of Things (IoT), 5G, autonomous 
vehicles, quantum computing, to high-performance-computing.
    Intel ranks sixth among publicly-traded U.S. companies in its 
individual R&D investment,\1\ investing $18.7 billion in capital 
expenditures and $15.2 billion in R&D in 2021.\2\ Overall, Intel 
directly contributed almost $26 billion to U.S. Gross Domestic Product 
(GDP) in 2019, with a total GDP impact to the U.S. economy of $102 
billion.
---------------------------------------------------------------------------
    \1\ ``Intel's Impacts on the U.S. Economy'', Report Issued April 
2021, using data for FY 2019, available at https://www.intel.com/
content/www/us/en/newsroom/news/us-economic-impact-
study.html?wapkw=economic%20impact#gs.tptln6.
    \2\ Intel Corporation Annual 10-K for Fiscal Year Ending December 
25, 2021, available at https://www.intc.com/filings-reports/all-sec-
filings/content/0000050863-22-000007/0000050863-22-000007.pdf
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Manufacturing at Intel
    Intel is making unprecedented new investments in U.S. semiconductor 
manufacturing capacity. In the last 12 months alone, we have announced 
investments of $43.5 billion for the construction of new semiconductor 
fabrication facilities in Ohio and Arizona, and for the manufacturing 
of advanced semiconductor packaging technologies in New Mexico.\3\ This 
follows our recently completed $3 billion investment to expand our 
operations in Oregon.
---------------------------------------------------------------------------
    \3\ See Intel Press Releases available at https://www.intel.com/
content/www/us/en/newsroom
/news/intelannounces-next-us-site-landmark-investment-ohio.html; 
https://www.intc.com/news-events/press-releases/detail/1501/intel-
breaks-groundon-two-new-leading-edge-chip-factories; https://
www.intel.com/content/www/us/en/newsroom/news/new-mexico-
manufacturing.html.
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    Our most recent U.S. announcement in Ohio amounts to a $20 billion 
investment in a new greenfield manufacturing site in Licking County, 
which will result in two new mega fabs with the first one coming online 
by the end of 2025. A full build-out could grow to eight mega fabs and 
$100 billion over the next decade, assuming support from the CHIPS Act. 
The manufacturing operations at the Ohio site will produce chips with 
our most advanced transistor technologies. In addition to more than 
7,000 construction jobs, the fabs are expected to create 3,000 high-
paying, long-term Intel manufacturing and engineering jobs ranging from 
factory operators and equipment technicians to engineers and business 
support functions, many of which do not require a 4-year college or 
advanced degree.
Technology Development at Intel
    More than fifty years ago, Intel invented the world's first 
commercial microprocessor. We have led in process technology for more 
than four decades until recently, and developed all major logic process 
innovations that the semiconductor industry uses (i.e., strained 
silicon, Hi-K metal gate, 3D transistors). Intel is executing a plan to 
recapture the global leadership in process technology by 2025.
    Today, Intel's technology roadmap relies on new levels of 
innovation, including not only deep transistor-level enhancements, but 
also innovations all the way up the stack to the interconnect and 
standard cell level. The company has moved to an accelerated pace of 
innovation to enable an annual cadence of process improvements. Earlier 
this year, I unveiled one of the most detailed process technology 
roadmaps that Intel has ever provided, showcasing a new node naming 
system and breakthrough technologies including:

   RibbonFET, our first new transistor architecture in more 
        than a decade

   PowerVia, an industry-first new backside power delivery 
        method

   High NA EUV, our plans to adapt next-generation High 
        Numerical Aperture extreme ultraviolet lithography

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    Technology advances in electronic packaging have supported and 
sustained Moore's Law silicon scaling and have evolved to become an 
important enabler of product performance. Intel is a leader in 
heterogenous integration technology. Our Foveros advanced packaging 
technology uses 3D stacking to enable logic-on-logic integration, and 
when combined with our Embedded Multi-die Interconnect Bridge (EMIB) 
technologies, allows for the interconnection of different chiplets and 
tiles with essentially the performance of a single chip.

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Workforce at Intel
    Our industry supports a large and vibrant workforce. Each of the 
new leading-edge fabs we are building in the United States supports 
approximately 1,500 permanent Intel jobs, in addition to the many 
thousands of construction jobs created by these projects. And for each 
permanent Intel job we create, our operations indirectly support an 
additional 13 jobs among suppliers and partners in the semiconductor 
ecosystem. More broadly, the U.S. semiconductor industry directly 
supports 250,000 jobs, indirectly supports another one million jobs, 
and supplies digital infrastructure to countless employers across the 
country.
    Last week, Intel announced two new initiatives that together will 
invest $150 million into semiconductor-related research, education, and 
workforce development programs in two-and four-year institutions across 
the country.

   Intel announced a new 10-year, $100 million national 
        partnership with the National Science Foundation (NSF) \4\ to 
        expand semiconductor-related education and research programs. 
        Intel is committing $50 million to this initiative, with $50 
        million in matching funds from NSF. Funds will be used to 
        create new curricula for associate and undergraduate degrees, 
        certification programs, and reskill and upskill programs for 
        existing workers, as well as to support faculty training, 
        laboratory equipment, and research supporting semiconductor 
        design and fabrication.
---------------------------------------------------------------------------
    \4\ See ``Media Alert: Intel Launches Education and Research 
Initiatives for Ohio, US,'' Mar 17, 2022, https://www.intel.com/
content/www/us/en/newsroom/news/media-alert-intel-launches-education-
initiatives.html#gs.ty6ba3

   To support the new Silicon Heartland in Ohio, Intel is also 
        investing $50 million directly into Ohio institutions over the 
        next 10 years. This investment will fund various programs, 
        including the Intel Semiconductor Education and Research 
        Program for Ohio, a collaborative, multi-institution program 
        designed to improve semiconductor innovation and provide real-
        world experience to students.

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    Two weeks ago, Intel also announced a new ``Quick Start'' 
accelerated workforce development program with Arizona community 
colleges to train and retrain workers as semiconductor technicians.\5\ 
These and other initiatives build on the work Intel has been doing for 
years to promote cutting-edge research and prepare students for the 
industry, such as with local community colleges to develop and maintain 
microelectronics technology programs for semiconductor technicians. 
Through partnerships with NSF, Intel regularly funds education and 
research programs with colleges and universities across the country. 
And Intel funds numerous efforts like the Million Girls Moonshot (MGM) 
program \6\ to expand outreach to, and participation by, traditionally 
underrepresented groups, including underrepresented minority groups and 
women and girls.
---------------------------------------------------------------------------
    \5\ See ``Maricopa Maricopa Community Colleges and Intel to Launch 
New Semiconductor Manufacturing Workforce Development Initiative,'' 
March 7, 2022, https://www.intel.com/content/www/us/en/newsroom/news/
maricopa-community-colleges-intel-launch-workforce-development-
initiative.html#gs.tzsvej
    \6\ More information at https://milliongirlsmoonshot.org.
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State of U.S. Semiconductor Manufacturing
    The U.S. share of semiconductor manufacturing capacity has 
dramatically fallen over the last 30 years. In 1990, the United States 
manufactured 37 percent of the world's supply of semiconductors but 
today only produces 12 percent, a share forecasted to decline even 
further without intervention.\7\
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    \7\ See ``Government Incentives and U.S. Competitiveness in 
Semiconductor Manufacturing,'' by Antonio Varas, Raj Varadarajan, Jimmy 
Goodrich, and Falan Yinug, September 2020, available at https://
www.semiconductors.org/wp-content/uploads/2020/09/Government-
Incentives-and-US-Competitiveness-in-Semiconductor-Manufacturing-Sep-
2020.pdf
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    So how did we get here? The decline in U.S. manufacturing share was 
driven in part by countries in East Asia investing in this critical 
technology and in their domestic champions, creating vital chipmaking 
ecosystems in the process. Those investment policies, combined with 
lower labor rates, effectively created a 30-50 percent cost 
disadvantage to manufacture chips in the United States. At the same 
time, the cost just to build and equip a single manufacturing facility 
that used to cost just $3 billion a decade ago can now cost more than 
$10 billion, making government incentives critical to site location 
decisions. As a result, our industry has concentrated itself in East 
Asia. Intel constitutes more than half of the advanced logic being 
manufactured in the United States, and we are working to do more, but 
our competitors have a significant cost advantage that is increasingly 
difficult to overcome.
    Substantial investments into process technology development are 
also necessary to master the processes required to operate a leading-
edge fab, but integrated circuit scaling is getting more difficult as 
traditional devices reach their scaling limits. As a result, 
lithography is now the most important step in fabricating integrated 
circuits and is also the most expensive in terms of total wafer 
processing cost. Due to these dramatic increases in manufacturing and 
technology development expenses, fewer and fewer manufacturers globally 
can absorb the investments required to develop the latest node sizes 
(see figure below). Today, only three leading-edge logic manufacturers 
remain. \8\
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    \8\ See Kearney analysis in ``Europe's urgent need to invest in a 
leading-edge semiconductor ecosystem,'' Nov 2021, https://
www.kearney.com/documents/20152/272966470/Europes+urgent
+need+to+invest+in+a+leading-edge+semiconductor+ecosystem.pdf

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    Advanced packaging technologies are also undergoing a major 
transition from primarily connecting small geometry wiring on a die to 
the looser wiring density on a system board to connecting small 
geometry wiring between many die inside one package. This 3D 
Heterogeneous Integration, using novel package technology as its core 
building block, is becoming vital to the semiconductor industry as 
traditional chip scaling slows down. Currently, less than two percent 
of the capacity for assembly, test and substrate manufacturing is in 
the United States. With the reported investments of Asian countries 
coupled with that of Asian private sector companies in 3D packaging, 
the United States and U.S. based companies are becoming further 
challenged to maintain their leadership.
Semiconductor Technology R&D in the U.S.
    Intel and other semiconductor companies reinvest on average nearly 
20 percent of their revenue into R&D, one of the highest percentages of 
any sector. Forty years ago, Federal investment in semiconductor R&D 
was more than double that of private investment, but today, U.S. 
private investment is nearly 20 times that of public funding. Intel is 
committed to continuous investment in semiconductor manufacturing, but 
the private sector cannot do it alone, and time is not on our side. It 
takes at least three years to build state-of-the-art manufacturing 
facilities and five to 10 years for supply chains to move. Federal 
investment is needed urgently and would unlock tens of billions of 
dollars in private investment here at home.
    A November 2021 paper from the Boston Consulting Group (BCG) 
identified the two most significant gaps currently facing the United 
States in establishing those three ingredients: (i) a 30 to 50 percent 
cost disadvantage with East Asia that U.S. chipmakers face; and (ii) 
public funding for R&D, which lags both Taiwan and Korea where the most 
advanced semiconductors are currently manufactured.\9\ Not only is 
technology-specific Federal funding related to semiconductors as 
envisioned in USICA important, but Congress must also continue to 
encourage companies to invest private funds in U.S. R&D.
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    \9\ See ``Establishing Leadership in Advanced Logic Technology,'' 
Raj Varadarajan, Ramiro Palma, and Antonio Varas, Nov 2021, https://
web-assets.bcg.com/8d/cf/6a4a4ab34d5f962e1526
337ef691/bcg-establishing-leadership-in-advanced-logic-technology-nov-
2021-r2.pdf
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    Starting in January 2022, businesses are now required to amortize 
their R&D expenses over several years. Removing this deduction under 
the Tax Cuts and Jobs Act (TCJA) created the most regressive treatment 
of R&D investments globally. U.S. investment in research is already 
relatively flat. This major change will significantly increase the cost 
to perform R&D in the U.S., while other governments work to 
substantially increase R&D investment in their respective countries. I 
applaud the bipartisan work of Senators Hassan, Young, Cortez Masto, 
and Portman, whose bill, the American Innovation and Jobs Act, would 
restore this immediate deduction which has existed for nearly seven 
decades. As Congress works to reconcile the U.S. Innovation and 
Competition Act and the America COMPETES, we encourage Congress to 
incentivize R&D investment in the U.S. by fixing this important 
provision as well.
U.S. Workforce and Workforce Development
    As intended, the CHIPS Act would help the United States close the 
manufacturing share gap by levelling the playing field so companies 
would be more apt to choose to build their fabs domestically. Those 
fabs, however, will require significant expansion of talent pipelines. 
The industry depends on workers across a range of skillsets, including 
trade workers to build new fabs and packaging facilities; technicians 
and trade workers to operate and maintain these facilities; and 
advanced degree STEM graduates for research and development. Due in 
part to tight labor markets, hiring in each of these areas is already 
extremely difficult. These difficulties will only skyrocket as new fabs 
come on-line. Unless we do more as a country, workforce availability 
has the capacity to be the principle limiting factor to a strong U.S.-
based semiconductor industry.
    Intel has already begun to do its part to significantly expand 
talent pipelines, but more will certainly need to be done if we want to 
stay competitive as a nation, and the industry cannot do it alone. 
Federal investment through the CHIPS Act is an important start, as it 
would unlock additional private investment to increase domestic 
manufacturing and further drive the research, education, and workforce 
development efforts needed to support industry expansion. Additional 
efforts will also be needed to attract and retain students in STEM 
fields--particularly at the graduate level and in the sub-fields 
critical to the industry, such as electrical engineering and computer 
science. U.S. students do not choose those fields at anywhere near the 
rate needed to support significant industry expansion. And our outdated 
immigration system makes it extremely challenging to hire and retain 
foreign students graduating from U.S. universities in these critical 
fields. If we are to stay competitive as a country, Congress must work 
to improve the industry's ability to win the global competition for 
talent, especially at the highest levels.
Supply Chain Resilience
    The global chips shortage has been uniquely impactful among the 
many supply chain woes the world has experienced since March 2020. For 
two years now, U.S. companies and consumers have had to navigate a 
global chip shortage and its rippling effects. Semiconductors are a 
critical part of every digital device, powering our phones, cars, 
hospitals, and factory floors. Yet the pandemic brought into sharp 
relief the state of the semiconductor supply chain as neither stable 
nor durable. A severe supply-demand imbalance led to idled factory 
lines, bare shelves, empty car lots, and backorders on goods. The 
global chip shortage cost the U.S. economy approximately $240 billion 
last year.
    Among the many lessons of the pandemic is that chip shortages can 
sideline both workers and entire segments of the economy, illustrating 
the national and economic security risks of falling behind. Our 
economic security depends on reliable, resilient access to 
semiconductors--access that requires near-term investment, at scale, in 
domestic capability and capacity. Given that so much of the 
semiconductor and technology industry supply chain resides in East 
Asia, future risks are far greater than the shortages we are 
experiencing today. The only way to alleviate the current supply-demand 
imbalance, prevent future shortages, and ensure resilient access to 
chips is to increase U.S. chip manufacturing capacity.
    Intel is committed to helping rebalance the global supply of chips 
and reduce current dependencies in East Asia. Increasing manufacturing 
in both the U.S. and EU are key to that goal, and consistent with the 
U.S. and European governments' desires to work together on supply chain 
issues. The US-EU Trade and Technology Council (TTC) has established a 
working group on supply chain issues, and at its first formal meeting 
issued a Statement on Semiconductor Supply Chains with specific focus 
areas, including increasing sorely needed investment in both 
jurisdictions.\10\
---------------------------------------------------------------------------
    \10\ The Statement reads in part: The United States and European 
Union ``reaffirm their willingness to build a partnership on the 
rebalancing of global supply chains in semiconductors with a view to 
enhancing their respective security of supply as well as respective 
capacity to design and produce semiconductors, especially, but not 
limited to, those with leading-edge capabilities. . .we underline the 
importance of jointly identifying gaps and vulnerabilities . . . and 
strengthening our domestic semiconductor ecosystems, from, research, 
design to manufacturing . . . we intend to focus on reducing existing 
strategic dependencies[,] especially through a diversification of the 
supply chain and increased investment.'' U.S.-EU Trade and Technology 
Council Inaugural Joint Statement, Annex IV (Pittsburg, PA September 
29, 2021); available at https://www.whitehouse.gov/briefing-room/
statements-releases/2021/09/29/u-s-eu-trade-and-technol
ogy-council-inaugural-joint-statement/.
---------------------------------------------------------------------------
    Strengthening U.S.-EU partnerships like the TTC is critical to help 
both regions reach their similar semiconductor objectives. Last week, I 
announced investment plans in the EU (specifically Germany, Ireland, 
France, Italy, Poland and Spain) of more than $36 billion for 
semiconductor R&D and manufacturing. These investments will complement 
the over $43 billion in capital investments we have previously 
announced in the U.S.
    The rest of the world is investing and moving very rapidly. As 
Congress deliberated how to fund the CHIPS Act over the last year, 
other countries in Asia and Europe have moved forward with their own 
new or additional incentive programs, as shown in the graphic below 
from the Semiconductor Industry Association (SIA). SIA writes, ``In 
2021 alone, 25 fab construction and expansion projects have been 
announced among U.S. foreign partners--Europe, South Korea, Japan, 
Taiwan, and Singapore. In contrast, just 4 have been announced in the 
United States. Government incentives are enabling foreign competitors 
to outpace the U.S. in fab construction and investment.'' \11\
---------------------------------------------------------------------------
    \11\ From ``Global Semiconductor Incentives,'' February 2022, by 
the Semiconductor Industry Association, https://www.semiconductors.org/
wp-content/uploads/2022/02/Global-Semiconductor
-Incentives_2-4-2022.pdf

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CHIPS Act Implementation Recommendations
    The efficient and expeditious implementation of programs under the 
CHIPS Act, including the financial assistance program for semiconductor 
manufacturing and R&D facilities (``Grant program''), the National 
Semiconductor Technology Center (NSTC), and the National Advanced 
Packaging Manufacturing Program (NAPMP), will be essential to alleviate 
semiconductor supply constraints more quickly and reverse the erosion 
of domestic capacity for U.S. semiconductors. Our comments on the 
Commerce Department's Request for Information, due this Friday, include 
several recommendations some of which are summarized below.
General Grant Program (Section 9902)
    The grant program should prioritize and expedite approval for 
shovel-worthy projects that have already been announced or are already 
underway to receive the first round of grants, in order to accelerate 
the impact of Federal funds and see results more quickly.
    The Federal government should also expedite Federal permitting 
requirements under the National Environmental Policy Act (NEPA) for 
these projects, which can add years to the approval timeline. Such 
expediting can be accomplished legislatively or administratively with 
fast-track approval,\12\ or more preferably, through a definitive 
``categorical exclusion''--at least for facilities already under 
construction where the environmental impact has been thoroughly 
examined under state law and is not significant. The Department of 
Energy's experience with the Advanced Technology Vehicles Manufacturing 
Incentive Program (``Auto Loan Program'') is instructive precedent. 
Under the Auto Loan Program, DOE provided loans to automobile 
manufacturers and component suppliers for projects that reequipped, 
expanded, and established manufacturing facilities in the United States 
to produce light-duty vehicles. In 2009, DOE applied categorical 
exclusions to manufacturing facilities that received Federal funding 
under the program after concluding that the activities contemplated 
were substantially similar to activities covered by the agency's 
existing categorical exclusions.\13\ The U.S. should also look to the 
fast-track permitting process for environmental and other assessments 
that the European Commission is asking its member states to implement 
for first-of-a-kind semiconductor facilities as a best practice.\14\
---------------------------------------------------------------------------
    \12\ See S. 3541, a bill to include certain computer-related 
projects in the Federal permitting program under title XLI of the FAST 
Act, and for other purposes; available at https://www.congress.gov/
bill/117th-congress/senate-bill/3451?s=2&r=4.
    \13\ See Letters between Steven Chu, Secretary of Energy, and Nancy 
Sutley, CEQ Chair (Mar. 19 and Mar. 20, 2009)(relying on Department of 
Energy Categorical Exclusion B1.31).
    \14\ Communication from the Commission to the European Parliament, 
the Council, the European Economic and Social Committee and the 
Committee of the Regions, A Chips Act for Europe, at 17, COM (2022) 45 
Final (Brussels 8.2.2022); Proposal for a Regulation of the European 
Parliament and of the Council, European Commission 2022/0032, 
establishing a framework of measures for strengthening Europe's 
semiconductor ecosystem (Chips Act), at 7-8 (Brussels 8.2.2022).
---------------------------------------------------------------------------
    The grant program should also consider factors in addition to those 
included in the statute when determining the grant amount for a 
specific project, such as the project's contribution to American 
technology leadership and supply chain security; the project's size, 
broader economic impact, and number and quality of American jobs it 
creates; more specific national security implications that the project 
may raise; and the project's ability to sustain itself after Federal 
assistance is used up and operate independently from foreign government 
influence and overseas technical assistance.
National Semiconductor Technology Center (NSTC)
    The Commerce Department, working through the National Institute of 
Standards and Technology (NIST), should establish a nationwide network 
of facilities at U.S. companies, leveraging access to existing 
infrastructure to save the Federal government cost and time. This 
network of centers or hubs should focus on conducting research for 
precompetitive ``breakthrough challenges'' that align industry around 
revolutionary goals more than five years out and ultimately can result 
in competitive products that can be manufactured at high volume in the 
United States. Intel proposes establishing one such center dedicated to 
providing access to advanced lithography tools and equipment, a 
critically important area to enable future process technology 
advancements.
    The Federal government should allow operation of the NSTC 
consortium to be led by a neutral non-profit entity with the guidance 
of a technical advisory committee, and should fund NSTC with the 
private sector jointly, in a manner that enables its long-term 
sustainment. NSTC should also support precompetitive prototyping to 
lower the barrier of entry for start-ups. Opportunities also exist for 
scaling semiconductor education and workforce initiatives at the 
university level through partnership and access to the NSTC.
National Advanced Packaging Manufacturing Program (NAPMP)
    The NAPMP should, with the guidance of a technical advisory body, 
focus on research projects such as those related to product capability, 
environmental footprint reduction, and supply chain resilience to 
advance domestic manufacturing. As part of the NAPMP, NIST should 
establish an Advanced Packaging Manufacturing Center to research new 
package and assembly/test technologies and manufacturing methods, and 
to demonstrate a fully integrated manufacturable process. Such a center 
could incorporate satellite building block projects to perform R&D on 
core technology elements and could facilitate heterogenous integration 
research in support of the NSTC along with accelerating innovation in 
packaging and test technology. It will be beneficial to have technical 
alignment between the NAPMP and the NSTC to ensure synergies on project 
prioritization and focus for pre-competitive R&D.
Conclusion
    Time is of the essence: American businesses in every sector across 
the economy are facing a semiconductor shortage, and the only way to 
alleviate the current supply-demand imbalance long term is to increase 
manufacturing capacity by funding and implementing the CHIPS Act. Polls 
consistently show Americans understand the importance of the chipmaking 
industry to the U.S. economy and national security, and widespread 
support for Congressional action to allocate Federal funding for the 
industry.\15\
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    \15\ Survey showed 90 percent of Americans either strongly or 
somewhat support the proposal to allocate funding for domestic 
chipmaking. Research was conducted by ENGINE INSIGHTS omnibus survey 
among U.S. adults over 18 based on a sample of 1,008 during November 
17-19, 2021.
---------------------------------------------------------------------------
    We hope Congress can soon find a path forward to reconcile the U.S. 
Innovation and Competition Act and the America COMPETES Act to fund the 
urgently needed CHIPS Act programs it authorized over a year ago. The 
rest of the world is moving forward, and the United States must move 
forward quickly as well.
    Intel is fully committed to diversifying the semiconductor supply 
chain. By the end of the decade we hope to see the U.S. manufacturing 
share grow from 12 percent to 30 percent, and the European 
manufacturing share grow from 9 percent to 20 percent. The CHIPS Act is 
the critical first step to make that happen.
    This Committee will play an important role in overseeing the CHIPS 
Act programs, and we look forward to working with you and the 
Department of Commerce to provide our perspective on implementation of 
these programs going forward. Thank you for holding this important 
stakeholder hearing today; I look forward to answering your questions 
and working with you to advance U.S. semiconductor manufacturing and 
R&D.

    The Chair. Thank you, Mr. Gelsinger. Thank you so much for 
that testimony, and hopefully we will get to the questions, and 
we can go drill in on some of this technology, and why it is so 
important in its application.
    Mr. Mehrotra, thank you so much for being here. We 
appreciate that Micron is a Pacific Northwest business, even 
though you are located in seven different states. And I know 
you have been CEO since 2017, and an award winner of IEEE 
awards for distinguished contributions for your technology. So 
welcome. Thank you for being here.

                 STATEMENT OF SANJAY MEHROTRA, 
                CHIEF EXECUTIVE OFFICER, MICRON

    Mr. Mehrotra. Thank you. Chair Cantwell, Ranking Member 
Wicker, and members of the Committee. I am honored to appear 
before you to discuss the semiconductor industry, and its 
importance in helping the United States preventing global--
sorry? Let me start over again.
    Chair Cantwell, Ranking Member Wicker, and members of the 
Committee, I am honored to appear before you to discuss the 
semiconductor industry and its importance in helping the United 
States maintain global competitiveness, and secure a leadership 
role in semiconductor manufacturing, and critical future 
innovation and technology. I commend this committee for its 
leadership on these important issues.
    With your permission, I will submit my full statement for 
the record.
    Escalating geopolitical risks have highlighted the urgency 
to reconcile and pass an innovation and competition bill that 
includes full funding for the CHIPS Act and the investments tax 
credit, part of the bipartisan FABS Act.
    These two incentives, together, would invigorate domestic 
manufacturing in the semiconductor industry, and allow 
companies to invest with confidence for the future. Together, 
these developments will kick start investment in workforce 
development, R&D, innovation, and expansion of manufacturing in 
the near term.
    Memory is at the leading edge of semiconductor 
manufacturing technology, and Micron is leading the world in 
this technology. We are proud of the almost 50,000 patents that 
we hold as a company. Memory chips can be found anywhere that 
data is stored or processed. Cell phones, automobiles, 
computers, defense systems, and memory is truly foundational 
for all future technological innovation and development.
    Micron is the only company developing leading-edge memory 
and storage technology in the U.S., with operations in nine 
different states. We are headquartered in Boise, Idaho, with 
43,000 team members worldwide, nearly 10,000 of our employees 
are U.S.-based. We also recently opened an advanced memory 
design center in Atlanta, Georgia, our first location in the 
southeast, giving us access to outstanding and diverse STEM 
talent.
    I hope to leave you with one key takeaway today. The U.S. 
Government needs to level the playing field and create 
incentives to support investment in domestic, semiconductor 
manufacturing facilities. Nearly every other country that has a 
significant share of semiconductor manufacturing offers major 
government incentives, including grants and tax breaks.
    Our Federal Government does not. Funding under the CHIPS 
Act and the refundable investments tax credit are both needed 
to ensure the development and continued visibility of a scaled 
up industrial base, and to guarantee the domestic supply of 
semiconductors, both leading edge and legacy chips, into the 
future.
    I want to emphasize that the CHIPS legislation is 
necessary, but not sufficient. The refundable investment tax 
credit is equally important to enable confident, long-term 
investments in significant manufacturing infrastructure.
    Micron has announced plans to invest more than $150 billion 
globally over the next decade in leading-edge memory 
manufacturing and research and development. We continue to 
explore plans to build new fabs in the United States. Our 
expansion plans, if executed, would constitute one of the 
largest single, semiconductor investments in the history of the 
United States, require close coordination with Federal and 
state partners to ensure the economic viability of our 
operations in a global, competitive marketplace.
    However, to be commercially viable over the long term, 
memory and storage fabs must produce at very high volumes 
consistently. Multiple facilities are required to achieve this 
scale each costing more than tens of billions of dollars fully 
equipped. Technological advancements are increasingly complex 
and expensive. Our competitors abroad have benefited from 35 to 
45 percent lower operating costs, due in part to the 
investments of other governments. This is a momentous 
opportunity to change the trajectory and put the U.S. on 
competitive ground for the future.
    I urge all parties to help pass both the CHIPS Act, and the 
FABS Act into law. Chips funding and the refundable investment 
tax credit will set the stage for a transformational investment 
in large-scale, leading-edge memory manufacturing in the United 
States, and ensure the United States does not lose out to its 
competitors abroad.
    Thank you, again, Chair Cantwell, Ranking Member Wicker, 
and members of the Committee for the opportunity to testify 
today. And I look forward to your questions.
    [The prepared statement of Mr. Mehrotra follows:]

 Prepared Statement of Sanjay Mehrotra, Chief Executive Officer, Micron
    Chair Cantwell, Ranking Member Wicker, and members of the 
Committee, I am honored to appear before you to discuss the 
semiconductor industry and its importance in helping our country 
maintain global competitiveness and secure a leadership role in 
semiconductor manufacturing and critical future innovation and 
technology. I commend this committee for its leadership on these 
important issues.
    The COVID 19 crisis and the ongoing conflict in Russia & Ukraine 
have underscored the fragility of our supply chain and the national 
security and economic risks of a decline in chip manufacturing in the 
United States. In this environment, it is increasingly urgent that 
Congress move forward on efforts to reconcile and pass an innovation 
and competition bill that includes full funding for the CHIPS Act. This 
investment will kick start investment in workforce development, R&D, 
innovation, and expansion of manufacturing in the near term. It is 
equally important that Congress passes the refundable investment tax 
credit, part of the FABS Act, to create a long-term incentive that 
would invigorate domestic manufacturing in the semiconductor industry 
and allow companies to invest with confidence for the future. With your 
permission I will submit my full statement for the record.
    I appreciate the opportunity to speak today about the important 
responsibility that we in the semiconductor ecosystem have in 
partnership with the government to protect United States Technology 
Leadership for the future. I testify today as Chief Executive Officer 
of Micron--the world leader in memory and storage technology. Micron 
manufactures DRAM chips, which provide rapid access to data for 
processing, and NAND flash chips, which provide long term data storage. 
Memory is the leading-edge of semiconductors and Micron is leading the 
world in both DRAM and NAND memory. Memory chips can be found anywhere 
that data is stored or processed--cell phones, automobiles, computers, 
defense systems--and is truly foundational for all future technological 
innovation and development. Micron is the only company developing 
leading-edge memory and storage technology here in the U.S., with 
operations in seven different states--Idaho, Colorado, Texas, 
Minnesota, Virginia, California, and Georgia.
    We are headquartered in Boise, Idaho, and we have 43,000 team 
members worldwide, with nearly 10,000 of them located in facilities 
across the country. These facilities include our Manassas, Virginia, 
plant just 30 miles from here, where we manufacture memory and storage 
solutions. These products not only unlock innovation across American 
industries, but also create the much-needed legacy chips for our 
automotive and defense industry. Our Boise headquarters is home to the 
world's most advanced memory research center including 6,000 
researchers, engineers, technicians, and other support functions.
    We also recently opened an advanced memory design center in 
Atlanta, Georgia, where we will partner with leading institutions like 
Georgia Tech and the Atlanta University Center Consortium of 
Historically Black Colleges and Universities to source outstanding and 
diverse STEM talent. This work is critically important because it helps 
address the workforce development and national security challenges of 
the present moment.
    Micron is committed to investing in the United States and we have 
already made significant contributions to leading-edge research and 
development and other areas that will lay the foundation for the more 
robust domestic manufacturing programs and facilities of the future.
    I hope to leave you with two key takeaways today:

   First: The United States must be self-sufficient in 
        development and production of semiconductors. This is crucial 
        to our technology leadership in the world and imperative to our 
        national security. Our country requires a robust semiconductor 
        industrial base to maintain our global technological leadership 
        in areas from essential consumer products to cloud computing 
        capabilities and defense systems. In particular, memory and 
        storage technologies, which are foundational for all modern 
        computing, are indispensable to a digital and data-intensive 
        future. Incentive programs such as those included in the CHIPS 
        legislation are a good start. This initial funding must be 
        immediately supplemented by long-term incentives, including a 
        refundable investment tax credit, to ensure the continued 
        viability of the scaled-up industrial base and guarantee the 
        domestic supply of semiconductors--both leading-edge and legacy 
        chips--into the future. I want to emphasize that the CHIPS 
        legislation is necessary but not sufficient--the refundable 
        investment tax credit is equally important to enable confident 
        long-term investments in significant manufacturing 
        infrastructure. As this ambitious process will require years, 
        if not decades, of sustained investment, speed is of the 
        essence. Strengthening U.S. capacity to manufacture memory and 
        storage semiconductors will leverage industry's technological 
        leadership to enhance the country's national and economic 
        security;

   Second: A renewed focus on supply chains and American 
        manufacturing must be matched by continued investment in 
        research and development to sustain the technological 
        leadership of American universities and semiconductor companies 
        and to meet the technological demands of the emerging data 
        economy. The semiconductor industry invested $40 billion in 
        research and development in 2020. The industry consistently 
        spends 20 percent of revenue in R&D on average, the highest of 
        any industry. CHIPS Act funding for the National Semiconductor 
        Technology Center (NSTC) and the Department of Defense-led 
        Microelectronics Commons will support these efforts by 
        leveraging the innovation of American researchers and startups 
        to bring new technologies from ``lab-to-fab,'' unlocking the 
        benefit of these technologies for American industry. At the 
        same time, expanded funding for research by the NSF, NIST, and 
        Energy Department's Office of Science among others authorized 
        under the pending innovation legislation will enable the basic 
        research needed to unlock the next generation of advances in 
        microelectronics. An increase in R&D investment supported by 
        the CHIPS Act will generate strong growth in employment and 
        economic output. In fact, according to the Semiconductor 
        Industry Association's research, every dollar invested by the 
        government in R&D creates $16 in GDP growth.
The importance of a domestic industrial base
    Two-thirds of silicon wafers produced globally today are in memory 
and storage semiconductors. Of that total, only 2 percent is produced 
in the United States, all of it at our Manassas, Virginia fab. The 
remaining 98 percent is produced in Asia in large-scale fabrication 
facilities supported by supplier and talent ecosystems that have been 
developed with extensive domestic government support over the past 20 
years. Collaboration between government and industry beginning with 
CHIPS Act funding and a refundable investment tax credit will kick-
start the process of bringing investments back to the United States but 
will not fully reverse this trend.
    As a result, U.S. manufacturers have come to rely on semiconductors 
produced overseas, primarily in Asia. With global supply chains facing 
unprecedented pressure in recent years, it is critical that the U.S. 
address this systemic vulnerability and invest to expand its domestic 
industrial base across all fronts, including R&D, manufacturing, 
skilled workforce, and essential component supply chains. In addition, 
as recent events have demonstrated, U.S. leadership in semiconductor 
technology is a core component of our country's leverage in defending a 
peaceful international order.
    Memory and storage have grown from 10 percent of the global 
semiconductor industry twenty years ago to about 30 percent of the 
semiconductor industry today. We expect this trend to continue. For 
example, 5G phones have 50 percent more memory (DRAM) and double the 
storage (NAND) content compared to 4G phones. Today's autonomous 
vehicles require more than ten times the amount of memory and storage 
that previous generation cars used to use and this memory consumption 
will continue to increase as this technology evolves and proliferates.
    Given that memory and storage will play an indispensable role in 
driving innovation and manufacturing not only in the semiconductor 
industry, but across the global economy, it is essential to create and 
sustain an environment that will enable ambitious expansion of memory 
and storage manufacturing capabilities in the United States.
Federal Incentives
    Federal incentives are critical to enabling the large scale of 
manufacturing required in memory and storage at a globally competitive 
pace. To be commercially viable over the long term, memory and storage 
fabs must produce at very high volumes consistently over time. Multiple 
facilities are required to achieve this scale, each costing more than 
$20 billion fully equipped. Technological advancements come with 
increasing complexity, requiring ever-higher capital and operating 
expenses on the part of memory and storage manufacturing companies. Our 
competitors abroad have benefited from 35-45 percent lower operating 
costs due to the investments of other governments.
    For example, incentives offered by South Korea resulted in the ROK 
government's announcement that the country's leading semiconductor 
companies will invest more than $450 billion in the semiconductor 
industry by 2030. European nations have also been successful in 
attracting large-scale investment due to their significant government 
incentives. To ensure the long-term impact of such investments, 
manufacturing incentives must be coupled with a refundable investment 
tax credit (ITC). While the CHIPS grant program as currently envisioned 
will help bridge the cost differential between the United States and 
other countries in upfront costs, a refundable ITC is critical to 
bridge the differential in ongoing costs of operation. A refundable ITC 
will also provide an equitable and efficient means to allocate 
government funds toward strategic projects with the greatest potential 
to help build domestic semiconductor self-sufficiency. Micron 
appreciates efforts in this chamber and in the House to date to 
introduce robust ITC initiatives such as the FABS Act. The exponential 
and transformational impact this will have on the U.S. economy should 
not be underestimated. If semiconductor companies can make these large 
investments in this country in partnership with the U.S. government, 
the impact will be significant. The chip industry tends to benefit from 
colocation and highly concentrated clusters or ecosystems. When fabs 
are sited in new locations, extensive pools of talent and resources 
inevitably follow. Those investments have in recent years been 
primarily in Asia and combined with other economic factors have led to 
a 35-45 percent cost disadvantage for U.S. semiconductor memory 
companies to build and operate domestic fabs vs. Asian competitors. 
This is a momentous opportunity to change that trajectory and put the 
U.S. on competitive ground for the future.
    Micron has announced plans to invest more than $150 billion 
globally over the next decade in leading-edge memory manufacturing and 
research and development. As part of this process, we continue to 
explore plans to build new fabs in the United States. Our expansion 
plans, which if executed would constitute the largest single 
semiconductor investment in the history of the United States, require 
close coordination with Federal and state policies to ensure the 
economic viability of our operations in a global, competitive 
marketplace.
    Micron is fully aware of its responsibility to the American people 
whose tax dollars would fund proposed incentives programs. While we 
anticipate that a significant amount of Federal funding will be 
required to make a mega-fab viable, a major investment in a new 
domestic fab would be an investment that benefits the entire U.S. 
supply chain. For example, building a fab require tens of billions of 
dollars of capital expenses in manufacturing equipment, construction, 
and IT systems, as well as billions of dollars annually in operational 
expenses related to gases and chemicals, technical services, repair and 
maintenance, utilities, and other materials. These costs manifest as 
direct, sustained investment in the U.S. supplier base. Further, a new 
fab would result in tens of thousands of community jobs over the long 
term, a large proportion of which would be in trade roles for 
constructing and maintaining these leading-edge clean room facilities. 
In other words, successful and sustainable investments in new 
manufacturing will not only benefit the U.S. semiconductor industry, 
but also the prosperity and national security of the United States as a 
whole.
    Micron and our partners stand ready to work with members of this 
Committee, the entire Congress, and the Executive Branch to ensure the 
United States achieves the world's leading digital and data-intensive 
economy in the decades ahead. I urge all parties to capitalize on the 
momentum generated by today's hearing and help pass both the CHIPS Act 
and the FABS Act into law. Doing so will set the stage for a 
transformational investment in large-scale leading-edge memory 
manufacturing in the United States and ensure the United States does 
not lose out to its competitors abroad.  Thank you again, Chair 
Cantwell, Ranking Member Wicker, and members of the committee for the 
opportunity to testify today and I look forward to your questions.

    The Chair. Thank you so much for your testimony, and we 
appreciate you being here. We are now going to go Mr. Preston 
Feight, who is joining us from Europe actually. But PACCAR is 
located in the State of Washington. We are very proud of them 
as a manufacturer of medium-and heavy-duty trucks, and leader 
in that in the world.
    I know he wanted to be here in person, but it is so 
important to get his viewpoint on how this shortage affects the 
supply chain, and more importantly, the transition to where 
PACCAR would like to go, if we can continue U.S. leadership on 
the R&D side. And very much appreciate you joining us.
    Thank you, Mr. Feight, we will go to you.

                 STATEMENT OF PRESTON FEIGHT, 
              CHIEF EXECUTIVE OFFICER, PACCAR INC

    Mr. Feight. Great. Thank you, Chair Cantwell, Ranking 
Member Wicker, and other distinguished members of the 
Committee, thanks for inviting me to testify today.
    PACCAR is the manufacturer of iconic Peterbilt, Penworth, 
and DAF trucks. Our truck brands represent nearly 30 percent of 
the Class 8 market in the U.S. and Canada, and around 16 
percent of the heavy-duty truck market in Europe.
    PACCAR was founded in 1905 and is an American-owned 
manufacturer of heavy trucks. We are headquartered in 
Washington State, and our great people operate state-of-the-art 
factories that build Kenworth trucks in Washington State and 
Ohio; Peterbilt trucks in Texas; and PACCAR engines, as noted 
earlier, in Mississippi.
    PACCAR also has engineering and innovation centers in 
Washington State, Texas, and California, and that is where we 
develop our technology leading, zero-emissions, autonomous, and 
connected vehicles.
    Thanks for your bipartisan work to address the 
semiconductor supply shortage. The chip shortage has been 
limiting the production of commercial trucks for a year now. 
This has led to a shortage of trucks to move goods throughout 
the country, disrupted supply chains across numerous 
industries, raised prices for consumers, and delayed access to 
critical goods and services for businesses and communities.
    Over 70 percent of all the freight tonnage that moves in 
America is transported on a truck. Over 80 percent of U.S. 
communities depend exclusively on trucks to deliver food and 
agricultural products, fuel and medicine, manufacturing inputs, 
business supplies, and consumer goods from groceries to 
automobiles.
    We all experienced the importance of the trucking industry 
during the pandemic. And more trucks are needed now to build 
new housing, highways, bridges, clean energy infrastructure, 
and communications networks.
    Basically, America's economy moves on trucks, and truck 
manufacturers, and the suppliers need an adequate, predictable, 
and affordable supply of semiconductors to build and keep 
trucks on the road. Instead, we continue to face shortages.
    Today, throughout the industry, thousands of unfinished 
trucks are parked across the country waiting for chip-enabled 
components, and additional trucks are out of service waiting 
for repair parts.
    This is disturbing considering the entire U.S. Class 8 
trucking market requires an estimated 13 million semiconductors 
last year, compared to a total semiconductor industry output of 
over 1 trillion chips, so just one out of every 86,000 
semiconductors are needed to keep America and its supply chains 
moving.
    A year ago, during the pandemic there were legitimate force 
majeure events, such as COVID-related plant shutdowns, an ice 
storm in Texas, and a fire in Japan that led to chip delays.
    To help mitigate the issues associated with those events, 
truck manufacturers spent a tremendous amount of money on 
medium-and long-term engineering redesigns to help reduce the 
impact of chip constraints, and have engaged with chip 
producers to align on best practices.
    Still, shortages remain, and truck OEMs have paid premium 
prices to purchase chips on the broker market when it is not 
possible to purchase chips directly from industry suppliers and 
chip manufacturers. These broker prices are often 20 to 30 
times higher than contract prices. Furthermore, manufacturers 
continue to receive a lack of clarity on semiconductor delivery 
schedules and experience cancellations from our suppliers often 
with inadequate visibility being provided.
    These semiconductors are critical to support the necessary 
production of trucks, and this creates turmoil for all 
manufacturers who must manage immediate production changes or 
be forced to shut down plants. Simply put, the fabric of 
America is adversely impacted when truck factories are forced 
to shut down or curtail production due to these shortages.
    To address the costly impact on America's trucking industry 
and broader economy, we suggest that companies requesting CHIPS 
Act funding be required to meet the needs of American critical 
businesses, including truck manufacturers, before they are 
approved to receive U.S. taxpayer dollars.
    This could be accomplished using the Essential Critical 
Infrastructure Workforce Guidance developed by the DHS 
Cybersecurity and Infrastructure Security Agency, which was 
used throughout the pandemic to ensure continued operations in 
critical national functions. We are concerned that without up-
front conditions on the use of CHIPS Act funding, the ongoing 
chip supply constraints and allocations could limit trucks from 
delivering essential goods and services to our communities.
    To ensure the accountability of this public funding and 
provide near-term relief to America's trucking industry and 
supply chains, we recommend that applicants for CHIPS Act 
funding be required to submit a plan to the Commerce Department 
detailing how their existing semiconductor allocation strategy, 
and investment decisions are currently, and will in the future, 
prioritize the production of semiconductors, to support 
critical infrastructure industries and related jobs in the 
United States.
    Thank you again for the opportunity to share our experience 
and perspective, and for your efforts to strengthen America's 
economic competitiveness. We look forward to your questions.
    [The prepared statement of Mr. Feight follows:]

    Prepared Statement of Preston Feight, Chief Executive Officer, 
                               PACCAR Inc
    Chair Cantwell, Ranking Member Wicker, and other distinguished 
members of the Committee, thank you for inviting me to testify today.
    PACCAR is the manufacturer of iconic Peterbilt, Kenworth and DAF 
trucks. Our truck brands represent nearly 30 percent of the Class 8 
retail sales market in the U.S. and Canada and around 16 percent of the 
heavy-duty truck market in Europe. PACCAR was founded in 1905 and is an 
American-owned manufacturer of heavy-duty trucks.
    We are headquartered in Washington State and our great people 
operate state of the art factories that build Kenworth trucks in 
Washington State and Ohio; Peterbilt trucks in Texas; and PACCAR 
engines in Mississippi.
    PACCAR also has engineering and innovation centers in Washington 
State, Texas and California which help to develop our technology 
leading zero-emissions, autonomous and connected vehicles.
    Thank you for your bipartisan work to address the semiconductor 
supply shortage.
    The chip shortage has been limiting the production of commercial 
trucks for a year now. This has led to a shortage of trucks to move 
goods throughout the country, disrupted supply chains across numerous 
industries, raised prices for consumers, and delayed access to critical 
goods and services for businesses and communities.
    Over 70 percent of all the freight tonnage that moves in America is 
transported on a truck. Over 80 percent of U.S. communities depend 
exclusively on trucks to deliver food and agricultural products, fuel, 
medicine, manufacturing inputs, business supplies, and consumer goods 
from groceries to automobiles.
    We all experienced the importance of the trucking industry during 
the pandemic. And more trucks are needed now to build new housing, 
highways, bridges, clean energy infrastructure, and communications 
networks.
    America's economy moves on trucks, and truck manufacturers and the 
suppliers need an adequate, predictable, and affordable supply of 
semiconductors to build and keep trucks on the road. Instead, we 
continue to face shortages.
    Today, throughout the industry, thousands of unfinished trucks are 
parked across the country waiting for chip-enabled components, and 
additional trucks are out of service waiting for repair parts.
    This is disturbing considering the entire U.S. Class 8 truck market 
required an estimated 13 million semiconductors last year, compared to 
total global semiconductor industry output of over 1 trillion chips. 
That equates to just 1 out of every 86,000 semiconductors needed to 
keep America and its supply chains moving.
    A year ago, during the pandemic there were legitimate Force Majeure 
events such as COVID-related plant shutdowns, an ice storm in Texas, 
and a fire in Japan that led to chip delays.
    To help mitigate the issue, truck OEMs have spent a tremendous 
amount of money on medium- and long-term engineering redesigns to help 
reduce the impact of chip constraints and have engaged with chip 
producers to align on best practices.
    Still, shortages remain, and truck OEMs have paid premium prices to 
purchase chips on the broker market when it is not possible to purchase 
chips directly from industry suppliers and the chip manufacturers. 
These broker prices are often 20 to 30 times higher than contract 
costs.
    Manufacturers continue to receive a lack of clarity on 
semiconductor delivery schedules and experience cancellations from our 
suppliers often with inadequate visibility being provided. These semi-
conductors are critical to support the necessary production of trucks, 
and this creates turmoil for all manufacturers who must manage 
immediate production changes or plant shutdowns.
    Simply put, the fabric of America is adversely impacted when truck 
factories are forced to shut down or curtail production due to these 
shortages.
    To address the costly impacts on America's trucking industry and 
broader economy, we suggest that companies requesting CHIPS Act funding 
be required to meet the needs of American critical businesses, 
including truck manufacturers, before they are approved to receive U.S. 
taxpayer dollars.
    This could be accomplished using the Essential Critical 
Infrastructure Workforce Guidance developed by the DHS Cybersecurity 
and Infrastructure Security Agency (CISA), which was used throughout 
the pandemic to ensure continued operations of critical national 
functions.
    We are concerned that without up-front conditions on the use of 
CHIPS Act funding, the ongoing chip supply constraints and allocations 
could limit trucks from delivering essential goods and services to our 
communities.
    To ensure the accountability of this public funding and provide 
near-term relief to America's trucking industry and supply chains, we 
recommend that applicants for CHIPS Act funding be required to submit a 
plan to the Commerce Department detailing how their existing 
semiconductor allocation strategy and investment decisions are 
currently, and will in the future, prioritize the production of 
semiconductors to support critical infrastructure industries and 
related jobs in the United States.
    Thank you again for the opportunity to share our experience and 
perspective, and for your efforts to strengthen America's economic 
competitiveness. I look forward to your questions.

    The Chair. Thank you, Mr. Feight. And thank you for that 
suggestion on focusing on critical businesses. I think it is 
really important in a time of shortage, for us to be very 
specific about what our needs are and how we accomplish them. 
So thank you for that, and again, I don't know what time it is 
in Europe, but we appreciate you communicating with us here.
    We will now turn to Mr. Archer. I am so pleased that all 
our panelists are not only CEOs, but engineers. It gives us a 
chance to dig deep on to some of the science that we are trying 
to get right, which is part of the mission of USICA is the 
innovation side of science, and the R&D investments, and 
particularly the translational side, that is what USICA is 
about, how to translate the science faster.
    So Mr. Archer, your company, we can't just build fabs, we 
have to have the equipment and the tools in the fabs that do 
the work that help us keep our cutting edge here. You bring 
together physics, and you are a physicist, of materials, 
robotics, and other fields that we need to be leading edge in 
the United States in manufacturing. So we look forward to 
hearing your view on this part of the infrastructure that we 
need. Thank you for being here.

STATEMENT OF TIM ARCHER, PRESIDENT AND CHIEF EXECUTIVE OFFICER, 
                    LAM RESEARCH CORPORATION

    Mr. Archer. Thank you. Madam Chair, Ranking Member, and 
Members of the Committee, thank you for the opportunity to 
appear before you today.
    I am Tim Archer, President and CEO of Lam Research. One of 
the world's largest semiconductor manufacturing equipment 
companies. Simply put, Lam Research makes the machines that 
make the chips.
    Headquartered in California we have more than 16,000 
employees worldwide. We are a world leader in developing state-
of-the-art manufacturing equipment that brings together diverse 
discipline such as plasma physics, material science, advanced 
robotics, and artificial intelligence to create nanoscale 
semiconductor fabrication solutions. The complex machines we 
develop enable companies, like Intel and Micron, to produce 
their sophisticated integrated chips in high volume.
    I would like to thank you and others in Congress for the 
vision you have shown toward addressing both the challenges and 
opportunities facing the U.S. semiconductor industry. While 
recent events, like the chip shortage, have put a spotlight on 
the challenges, I would like to stress that U.S. leadership in 
semiconductor manufacturing technology is strong. Our 
competitiveness is rooted in the innovation, drive, and 
resourcefulness of American companies and workers across the 
semiconductor ecosystem.
    And I am proud of the role that Lam Research and our 
employees have played for more than four decades in setting the 
pace for innovation and in maintaining U.S. leadership in the 
global market.
    Today, semiconductors form the foundation of our smarter, 
faster, and more connected digital world. I believe it is vital 
that we create a secure and resilient supply of semiconductors 
while also accelerating innovation ahead of the rapidly 
evolving technological complexity.
    Congress recognizes the importance of both supply and 
innovation, and is taking bold steps to strengthen the 
semiconductor ecosystem through the CHIPS Act, which will 
fortify our supply chain, workforce, and domestic research and 
development.
    I believe this partnership of industry and government will 
contribute to U.S. leadership in semiconductor technology well 
into the future. As you continue to work on these efforts I 
would highlight three areas that could benefit from your 
continued consideration.
    First, an all-of-ecosystem approach. The chip shortage we 
are experiencing highlights the complex and interdependent 
nature of the semiconductor ecosystem and the need for 
sustained investment by companies throughout the supply chain. 
Lam Research has increased our workforce in the United States 
by over 45 percent in the past 2 years alone, adding more than 
3,500 jobs, including high-paying, engineering, and advanced 
manufacturing jobs at our facilities in California, Oregon, and 
Ohio. However, we also rely on hundreds of American suppliers, 
many of whom are struggling to keep up with the rapid pace of 
growth, while dealing with the lingering effects of the 
pandemic, and a tight labor market.
    We are grateful policymakers recognize these challenges and 
intend to support the industry comprehensively through the 
Commerce Department's grant program, established in the CHIPS 
Act, as well as through important R&D programs, like the 
Investment Tax Credit found in the FABS Act. We urge Congress 
to act quickly to pass these measures in support of the entire 
domestic ecosystem.
    Second, leveraging existing infrastructure: Together, 
government and industry can leverage existing infrastructures 
that have a history of driving technology development. 
Partnerships with academia and with the National Labs provide 
extensive capabilities and expertise critical to any 
collaborative innovation strategy. In our area, plasma research 
is particularly key to the future of semiconductor tool 
development.
    We are grateful to see legislative proposals such as the 
Microelectronics Research for Energy Innovation Act, a move 
forward to streamline coordination and better deploy Federal 
resources, including the National Labs, to sustain these 
partnerships.
    And finally, enabling shared innovation: Here is an 
outstanding opportunity to strengthen U.S. competitiveness, by 
bringing together industry, government, academia, and the 
National Labs in a centralized and collaborative space to 
enable shared innovation.
    The establishment of the National Semiconductor Technology 
Center, NSTC, will provide a new pathway to sustaining U.S. 
technology leadership by creating opportunities to explore new 
ideas and quickly transition breakthrough technologies to the 
production line.
    So, in closing, we believe it is vital that we prioritize 
innovation, competitiveness, collaboration, and supply chain 
security, to maintain U.S. leadership in this critical global 
industry.
    Thank you. And I look forward to your questions.
    [The prepared statement of Mr. Archer follows:]

         Prepared Statement of Tim Archer, President and CEO, 
                        Lam Research Corporation
    Madam Chair, Ranking Member, and Members of the Committee:

    Thank you for the opportunity to appear before you today.
    I am Tim Archer, President and CEO of Lam Research, one of the 
world's largest semiconductor manufacturing equipment companies. Simply 
put, Lam Research makes the machines that make the chips. With more 
than 16,000 employees worldwide, we manufacture equipment at facilities 
in California, Oregon, Ohio, representing and elsewhere around the 
world (with 67 percent of our manufacturing footprint in the U.S.) and 
conduct groundbreaking research and development in our advanced U.S. 
labs.
    We are a world leader in developing state-of-the-art manufacturing 
equipment that brings together diverse disciplines such as plasma 
physics, materials science, advanced robotics, and artificial 
intelligence to create nanoscale semiconductor fabrication solutions. 
The complex machines we develop enable semiconductor manufacturers to 
produce sophisticated integrated chips in high volume.
    I would like to thank you and others in Congress for the vision and 
resolve you have shown toward addressing both the challenges and 
opportunities facing the U.S. semiconductor industry. While recent 
events--including chip shortages--put a spotlight on the challenges, I 
would like to stress that U.S. leadership in semiconductor 
manufacturing technology is strong. With fabs in 18 states, 
semiconductors are America's fourth-largest export.\1\ The industry 
employs over 270,000 Americans directly, with an additional 1.6 million 
employed indirectly in related and adjacent fields.\2\ The U.S. 
competitiveness is rooted in the innovation, drive, and resourcefulness 
of American companies and workers across the semiconductor ecosystem. 
And I am proud of the role that Lam Research and our employees have 
played for more than four decades in setting the pace for innovation 
and in maintaining U.S. leadership in the global market.
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    \2\ See https://www.semiconductors.org/wp-content/uploads/2021/10/
CHIPS-FABS-Hill-hand
out-oct-2021.pdf
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    Today, semiconductors form the foundation of a smarter, faster, and 
more connected digital world. I believe it is vital that we create a 
secure and resilient supply of semiconductors while also accelerating 
innovation ahead of rapidly evolving technological complexity.
    Congress recognized the importance of both supply and innovation 
and is taking bold and decisive steps to strengthen the semiconductor 
ecosystem through the CHIPS Act, which will fortify our supply chain, 
workforce, and domestic research and development. I believe this 
partnership of industry and government--with American workers and 
ingenuity at its heart--will contribute to U.S. leadership in 
semiconductor technology well into the future. As you work on this and 
other related efforts to support our ecosystem, I would highlight three 
areas that could benefit from your continued consideration.
Supporting an ``all-of-ecosystem'' approach
    The current shortage of chips highlights the vital role of 
semiconductors throughout the entire economy--including aerospace, 
automobiles, communications, defense systems, information technology, 
manufacturing, healthcare, and other industries. It also highlights the 
complex and interdependent nature of the semiconductor ecosystem and 
the need for sustained investment by companies throughout the supply 
chain.
    To ensure a secure, and resilient supply of semiconductors, 
government and industry must take a holistic view of the value chain. 
Of critical importance, the CHIPS Act creates a new Federal policy to 
incentivize domestic semiconductor manufacturing through the Commerce 
Grant Program. The program will incentivize new U.S. fabs to meet the 
growing global demand for semiconductors. The U.S. currently has a 
robust semiconductor manufacturing base. However, the cost of building 
and operating a fab in the U.S. is now 20 to 40 percent higher than in 
other countries. As other global markets invest heavily in 
manufacturing, the Commerce Grant Program will act as a force 
multiplier for U.S. investment, ensuring that our industry can expand 
to meet accelerating global demand and maintain our technology 
leadership.
    These new fabs will depend on semiconductor manufacturing equipment 
and materials. A shortage of the necessary tools would hobble 
production, limiting the impact of taxpayers' investment, and 
ultimately pose a setback to U.S. leadership in the industry. A Grant 
Program with the flexibility to provide incentives across the entire 
value chain will increase resiliency and maximize the output and 
efficiency of expanded U.S. production.
    Finally, a Commerce Grant program accounting for the whole of the 
semiconductor ecosystem will ensure we are able to grow, train, and 
retain a skilled national workforce that will power our competitiveness 
for decades to come. Lam Research has increased our workforce in the 
U.S. by over 45 percent in the past two years alone, adding more than 
3,500 jobs, including high-paying research and advanced manufacturing 
jobs at our facilities in California, Oregon, and Ohio. However, in the 
manufacture of our equipment, we also rely on hundreds of American 
suppliers, many of whom are struggling to keep up with the rapid pace 
of growth while dealing with the lingering effects of the pandemic and 
a tight labor market. We are grateful policymakers recognize these 
challenges and intend to support the industry comprehensively through 
the Commerce Department's Grant Program, established in the CHIPS Act, 
as well as through important R&D programs like the Investment Tax 
Credit found in the FABS Act. We urge Congress to act quickly to pass 
these measures in support of the entire domestic ecosystem.
Leveraging existing infrastructure
    Together, government and industry can leverage existing 
infrastructures that have a history of driving technology development. 
Policymakers have rightfully identified that partnerships with academia 
and with the National Labs provide extensive capabilities and expertise 
critical to any collaborative innovation strategy. In our area, plasma 
research is particularly key to the future of semiconductor tool 
development, with potentially huge applications and across energy, 
transportation, cybersecurity, defense, and countless other sectors. 
Several of our National Laboratories have sterling records of 
pioneering work in this area. We are grateful to see legislative 
proposals such as the Microelectronics Research for Energy Innovation 
Act move forward to streamline coordination and better deploy Federal 
resources, including the National Labs, to sustain these partnerships.
Enabling shared innovation
    Lam invests $1.5 billion annually in research and development 
(R&D), over 90 percent in our world-class facilities in the United 
States and we hold more than 8,000 patents globally. Since 2015 we have 
funded over 160 research projects with 50 leading universities focused 
on addressing industry challenges. The transfer of revenue into R&D has 
been the key to Lam's success for more than 40 years. One example, 
Sense.iTM is a completely transformed plasma etch technology 
and system solution. The self-aware platform powered by our Equipment 
Intelligence technology, using AI and machine learning is the most 
innovative of its kind.
    While Lam and others in the industry make significant individual 
investments to maintain and grow technology leadership, we believe 
there is an outstanding opportunity to strengthen U.S. competitiveness 
by bringing together industry, government, academia, and the National 
Labs in a centralized and collaborative space to enable shared 
innovation. The establishment of the National Semiconductor Technology 
Center (NSTC) will provide a new pathway to sustaining technology 
leadership by creating opportunities to explore new concepts and 
quickly transition breakthrough technologies to the production line. 
The concentration of energy, resources, networks, and opportunity in 
the NSTC will also help to attract and train the next generation of 
innovators, strengthening yet another link in the supply chain: our 
workforce.
Closing
    Those of us in the semiconductor ecosystem prioritize innovation, 
competitiveness, collaboration, and supply chain security--as you do. 
We appreciate the opportunity to work together on these issues and look 
forward to collaborating on the important objective to maintain our 
technology leadership in this critical global industry.

    The Chair. Thank you, Mr. Archer. Thank you so much for 
that. I love collaboration focus particularly because I heard a 
TED Talk about this that collaboration is the next form of 
innovation, because you can have the innovation but if you 
don't collaborate to get it in to implement it, then you don't 
have it. So around here we have to be more collaborative for 
sure, so.
    I am going to yield to my colleague for the first round of 
questions, and then let our colleagues who might be joining us 
remotely that we would then go to Senator Klobuchar, and then 
Senator Thune, and then I will jump in later with my questions. 
But I will turn to Senator Wicker.
    Senator Wicker. Well, Madam Chair, feel free to jump in at 
any point, because I think you and I are teammates on this.
    Let me start with Mr. Gelsinger. America's share of global 
semiconductor manufacturing is 12 percent today. Where is the 
other 88 percent? Let us just sort of summarize what we have 
learned so far. And I think you have to press the button.
    Mr. Gelsinger. OK. Thank you. The largest portion is in 
Asia, right, led by Taiwan, Korea, China and Japan; so 
approximately 80 percent is in Asia, and about 9 percent in 
Europe, and about 12 percent in the U.S.
    Senator Wicker. OK. And the reason for that, we have gone 
from 40 percent in 1990 to 12 percent today. It is just more 
cost-effective for companies to manufacture semiconductors in 
those Asian locations; is that correct?
    Mr. Gelsinger. I believe there are primarily two effects, 
one is the Asians aggressively pursued this industry with very 
strong policies and high incentives. It was also much of the--
--
    Senator Wicker. Financial incentives provided by 
governments?
    Mr. Gelsinger. Primarily.
    Senator Wicker. Like, what do they do in Taiwan and China?
    Mr. Gelsinger. The incentives, you know, typically could be 
30 to as much as even 70 percent for some of the capital 
incentives in China. So very strong capital incentives have 
been available, and those countries have recently announced 
major expansions of those programs. For instance, Korea just 
announced $100 billion capital incentive program for their 
semiconductor industry.
    Senator Wicker. And that is one factor.
    Mr. Gelsinger. Yes.
    Senator Wicker. The government incentives?
    Mr. Gelsinger. And then additionally, many of the lower-end 
supply chains were already in Asia, and so it is a 
consolidation of the supply chain, so it ends up being a more 
efficient, overall, supply chain that they have built up.
    Senator Wicker. For example?
    Mr. Gelsinger. For example, power supplies, sheet metal 
enclosures, displays, they have consolidated and a lot of this 
in China specifically around the supply chain consolidation 
that has occurred there. So more efficient supply chains, all 
focused on cost, and as we say, you know, the focus has been on 
cost, not on resilience. We believe we need a globally 
balanced, more resilient supply chain for the future.
    And what we are suggesting in the CHIPS Act, essentially, 
is rebalancing that 30-to 50 percent gap that we spoke about, 
allowing the U.S. industry to be competitive as we compete for 
the global market.
    Senator Wicker. And the labor costs are part of this?
    Mr. Gelsinger. The labor costs certainly are a factor, but 
for fabs it is primarily capital cost, right, it is the largest 
portion, the depreciation of capital cost dominates the overall 
cost. Labor costs play larger portions in other areas of the 
supply chain.
    Senator Wicker. Mr. Mehrotra, do you want add anything to 
this line of questioning?
    Mr. Mehrotra. I would add, that today in the U.S. there is 
2 percent of the semiconductor memory manufacturing, 98 percent 
of the semiconductor memory manufacturing is in Asia today, for 
the very reasons that Pat articulated. That over the course of 
the last 20 years Asian governments have supported bringing 
semiconductor industry onshore, in various countries that Pat 
outlined earlier as well.
    And the 2 percent that is being produced here in the U.S., 
actually is being produced by Micron, close by, in Manassas, 
Virginia. And of course we have leading-edge R&D center in 
Boise as well. It is imperative that the 35-to 45 percent cost 
difference that exist for manufacturing in Asia to build and 
operate these leading-edge fabs that gap is overcome through 
CHIPS Act, and investment tax credits, in order to be able 
bring more manufacturing back onshore, and really provide 
sustainable long-term, resilient operations.
    And again, memory is important because memory represents 
nearly 60 percent of wafer production worldwide in 
semiconductors. We need to bring more memory production in the 
U.S., along with the rest of the semiconductor ecosystem 
advancement in order to really ensure that the economic 
prosperity and global leadership for semiconductors--and 
national security considerations--are met.
    Senator Wicker. So it is fair to say that governments in 
these locations around the world have made a decision to spend 
government funds to incentivize the production of these chips 
in their jurisdictions?
    Mr. Gelsinger. Yes, that is a good----
    Senator Wicker. And if we are going to get them back, we 
are going to have to do, as the CHIPS Act suggests, and as 
USICA suggests, and spend some government money out of the 
Federal Treasury, through either grants, loans, or tax 
incentives, to incentivize manufacturing here in the United 
States?
    Mr. Gelsinger. Yes. We would say that is a very good 
summary. And I would also emphasize that we have seen recently, 
that the world is recognizing the criticality of the 
semiconductor industry, and we have seen actions as part of the 
Europeans, Indians, Chinese, Koreans, and Taiwan, very recently 
to further incentivize these industries on their shores. So the 
criticality and the urgency, as we have said, is nigh before 
us, the world is moving quickly on the importance of this 
industry on their soil.
    Senator Wicker. Senator Johnson, you are next, but I am 
going to take some leeway to ask Mr. Feight. Are we ready in 
the United States with a workforce trained well enough for 
getting this global percentage back from 12 percent up to where 
it ought to be? And what do we need to do in that regard?
    Mr. Feight. Well, Senator Wicker, I think, you know, from 
our experience with the U.S. workforce, which is extensive over 
100 years, we have an amazing workforce. We have great people 
in all of our locations that have high skills, whether that is 
in the Silicon Valley offices we have in California, or whether 
that is in Mississippi. So yes, we have great workforce, but 
obviously training is needed on specific skills for these 
industries as we develop them here.
    Senator Wicker. I believe there is a partnership with East 
Mississippi Community College.
    Mr. Feight. Mm-hmm. I have heard----
    Senator Wicker. MUW and Mississippi State University that 
is helpful to your Columbus facility; is that correct?
    Mr. Feight. That is very correct. We have had such 
wonderful experiences with our universities and schools around 
the area to develop people and put them into great careers and 
jobs. You are absolutely correct.
    Senator Wicker. Thank you very much. More questions later. 
Senator Johnson, you are recognized.

                STATEMENT OF HON. RON JOHNSON, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Johnson. Hi, Mr. Chairman.
    Mr. Gelsinger, so again, these are interesting specifics, 
only 12 percent of chip manufacturing here in the U.S. 
primarily because other countries have provided industrial 
policy basically, and they provide financial incentives for 
your industry to move overseas. Did the U.S. chip industry, did 
you ever consider, as you were moving all this manufacturing 
overseas and the risk to your own industry, not to mention 
national security?
    Mr. Gelsinger. I am very proud to say that Intel has 
remained primarily on U.S. soil over this period of time, and 
the vast majority of our investments are in U.S. and European 
soil, with a very small amount in Asia. Really what has 
happened is the rest of the industry has moved dramatically 
over this period of time, largely, responding to these 
incentives that we have described.
    Of our investments, well over half of them land on U.S. 
soil with approximately a third in Europe. We have been one of 
the few companies that have remained highly dedicated to U.S. 
R&D and manufacturing investments over the entirety of our 53-
year history. The trends that we have described have clearly 
affected the rest of the industry in a most dramatic way.
    Senator Johnson. So of the 12 percent produced in the U.S. 
what percentage of that 12 percent is Intel?
    Mr. Gelsinger. About half.
    Senator Johnson. About half. You know, obviously this would 
be considered unfair trade practices, correct; when you have 
got different countries subsidizing your industry, putting it 
at a competitive advantage because of government subsidies. And 
so I guess there is two ways of approaching that, you can slap 
tariffs on that, or you can try and start your own industrial 
policy here in the United States, which is apparently the path 
we are taking. Does that pretty well sum things up?
    Mr. Gelsinger. Well, and we would also emphasize that 
without such actions, right, we see that foreign countries, as 
we have already, right, indicated in the testimony, are taking 
very aggressive steps, and they weigh, they view and understand 
the criticality of semiconductors underlying every aspect of 
the digital future.
    And that is why we speak for such urgency and passion on 
this topic, to be restored on American soil. This is 
foundational to every other industry and every other aspect 
for, and thus we believe it is justified to take such steps as 
the CHIPS Act, as the FABS Act. And now we would say that this 
industry, one that was borne in the United States, right, this 
is our industry that underscores every aspect of humanity 
looking forward, now is the time for action.
    Senator Johnson. I think my concern is when government 
starts attempting to allocate capital just screws things up. It 
doesn't do it very efficiently or effectively. So again, I am 
concerned, as opposed to pushing the unfair trade practice 
route, going that route, to just, ``let us join in. Let us 
engage in the same type of activity.'' And so for the 
misallocation of capital, are you concerned about that; because 
you have government picking the wins and losses in this case?
    Mr. Gelsinger. You know, given what we have seen worldwide, 
you know, the 30-year trend is dramatic, right. These actions 
are not overnight actions that have been taken by foreign 
nations. While, clearly, there are concerns on how capital is 
allocated, without such steps our industry will be further 
undermined. We will lose critical mass, I believe, in the near 
future, and we will never have the opportunity to restore this 
industry on American soil. So that is why we are here.
    Senator Johnson. Can you give me just sort of the macro 
numbers we are talking about here? How many dollars of capital 
have been provided, in what I would consider unfair trade 
practices, by our oversea competitors? I mean how many hundreds 
of billions of dollars?
    Mr. Gelsinger. Well, just in the last year we have seen the 
Europeans suggest $45 billion, the Koreans suggest $100 
billion, the Chinese suggests over $100 billion. These are very 
significant investments. And what we are seeking in the CHIPS 
Act is to unleash public-private, leveraged investments, where 
these investments would unleash, you know, $3 to $4 for every 
dollar that is put into it, as well as the research investments 
are long term.
    You know, our industry was borne out of DARPA investments 
decades ago. These are long-term investments, as well as near-
term reversal in the manufacturing footprint that is most 
critical to the world.
    Senator Johnson. There is plenty of capital available to 
invest in semiconductors in the U.S. though, correct?
    Mr. Gelsinger. There is plenty of----
    Senator Johnson. I mean, it is not like we are short of 
capital.
    Mr. Gelsinger. There is plenty of capital to----
    Senator Johnson. It is just that there is unfair trade 
practices being engaged in by other countries?
    Mr. Gelsinger. You know, other countries have seen the 
criticality of this industry, and have invested in it as seed 
corn for so many other aspects of the technology industry. That 
is why they have chosen to take such practices aggressively. 
And we, you know, see that such actions need to be taken in the 
U.S. to restore this industry. Now is the time to act.
    Senator Johnson. It is almost mutually shared destruction, 
isn't it? It is going to be a race to the bottom? Again, I am 
real unabashed free trader, I don't like tariffs, but I almost 
hate government allocation of capital worse.
    Mr. Gelsinger. Well, as we think about things like tariffs 
and other export policies, by putting those in place, we are 
actually further hurting American industry, because other 
countries are not putting such limitations or practices in 
place on their industry. So to say that it is not helping our 
industry, but hurting it instead, it is very odd logic.
    We need to take steps to restore American competitiveness, 
to improve our trade practices, and export practices globally. 
And to do that, partnering with our friends globally is 
critical as well. Now is the time to act or this industry may 
never be back on American shores.
    Senator Johnson. I am fully aware that tariffs hurt 
American consumers. I got that. But again, I am just concerned 
about engaging in this race to the bottom in terms of, now 
government-to-government across the world is going be doing the 
capital investment for a particular industry. I just think 
that, long term is not a good solution.
    The Chair. Thank you, Senator. I am going to go next. But 
Senator Wicker wanted to make a quick comment.
    Senator Wicker. Just to follow up on something you said, 
Mr. Gelsinger, in response to a question Senator Johnson 
raised. When was the significant DARPA investment early on, and 
to what extent did the government supply funds to get us 
started there?
    Mr. Gelsinger. You know, many of the original elements of 
the semiconductor industry date back to Bell Labs, date back to 
the earliest days of DARPA, and many of those investments were 
made 50, 60 years ago that have produced many of the core 
technologies that the internet, that semiconductors, that AI 
runs on today. These are very long-term research investments.
    That is why we see things like the NSTC portion of the 
CHIPS Act a critical aspect, because we are not worried about 
just the next decade of this industry, but decades of this 
industry to the future.
    Senator Wicker. And this will be the last. Do you know if 
Trans-Pacific Partnership would have addressed some of these 
problems that Senator Johnson was asking about?
    Mr. Gelsinger. You know, I am a big believer in the TPP. I 
believe that would be good policy to work closely with both our 
European allies, as well as our Asian allies. These are 
countries that want to work with us. Also, as I mentioned in my 
oral testimony, many of these countries, together, represent 
almost all of the semiconductor technologies and equipment in 
the world, right, aligning with our partners and TPP; also the 
technology trade corroboration that has been initiated between 
the U.S. and Europe. We view these policies as very positive 
ones that we fully support.
    Senator Wicker. Well, Madam Chair, maybe the witness could 
supplement his answer on the record specifically about whether 
TPP addressed the subsidy of other governments of this type of 
research, in answer to the inquiry of Senator Johnson. Thank 
you, Madam Chair.
    The Chair. Thank you, Senator Wicker. And I am going to 
take my round now. I know we have other members who are 
waiting, and hopefully we will get to them. And then if people 
want a second round, we will be here as long as--as long as 
people want to be.
    I would like to--well, first I would like to say, you know, 
we had the same debate when we were talking about what happened 
with COVID and the airlines. And we are about to issue a report 
showing that the investment the government made and made 
quickly actually is going to pay the government back into the 
investment.
    So it was a COVID pandemic, and we had to make decisions 
about whether to keep a workforce, and keep them running, and 
the U.S. approach to that worked.
    So here, it is kind of, all of you have touched on this in 
so many different ways. It is about future investment. That is 
why this hearing is about the advancement of next-generation 
chips. It is about how does the United States keep its 
leadership in that? And as you all have noted, we have gone 
from 36 percent down to 12. And the question remains: If we do 
nothing right now, where are we going to go?
    So I definitely believe in ecosystems, I believe in the 
manufacturing supply chain that exists for automotives and for 
aviation. And I certainly want a manufacturing supply chain, 
and ecosystem to exist on something as essential as chip 
technology, given the Information Age.
    It is, you could say it is the ultimate supply chain, if 
you will. So the question on this graph here, you can see that 
the amount of U.S. leadership has continued to fall off as we 
go to those next-generation chips.
    [The information referred to follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    The Chair. So this isn't asked about how many chips you can 
produce, or whether you can produce chips that were the last 
generation of chips. This is about producing the next 
generation of chips with the higher intelligence.
    That is why, I don't know, Mr. Gelsinger, I really liked 
your detailed testimony about all the advancements that Intel 
is making. You know, the RibbonFET, the PowerVia, the EUV, that 
is a partnership with the European company, ASML, and obviously 
Mr. Archer is talking about this as well, as it relates to 
plasma.
    So this really, envisioned, you are kind of like the 
ultimate story of translational science that we are trying to 
capture in the R&D Bill. We are trying to tell our friends here 
and people in America that we have done a lot of basic 
research, we have done a lot of advanced research, but China is 
spending 80 percent of their dollars on commercialization.
    So this is about whether we take the next generation of 
technology and get it deployed faster, and remain on the 
leading edge, and if we don't, then all of that manufacturing 
is going to go somewhere else. Not in the United States. And as 
we can see from what has just happened, I think Americans, 
like, woke up and understand, intuitively, what supply chain is 
all about now.
    They know exactly what that means. That means they don't 
get their product. And now if you tell them that the ultimate 
product of the supply chain chips is all now leading-edge in a 
country--I mean in Taiwan, then you basically are sitting here 
with a big vulnerability of the United States. And I think the 
last events of several weeks make that even more poignant.
    So the question is: What is it that we need to keep doing 
to keep on the leading edge of this technology? So you gave us 
this--you gave us all these advancements in these chips which I 
wish I could drill down on, but basically you are talking about 
IP boost, you are talking about better connectivity, you are 
talking about more translation of.
    So from the first chip to today, what is the difference as 
far as what it means? And maybe I will ask Mr. Feight what it 
means to him when it comes to the product that he is trying to 
deliver today.
    But could you just give us, Mr. Gelsinger, or Mr. Mehrotra, 
what kind of--what are we talking about as far as advancements 
of chip capability? I mean, I believe in Moore's Law, but help 
people understand here: The first chip did X, and now here is 
where we are with this level of advancement.
    Mr. Gelsinger. Yes. Thank you. And, you know, on my lapel 
here I was the chief architect and designer of the 8046 chip 
for--Intel introduced in 1989. And this chip had 1.2 million 
transistors on it, right. The most advanced server chip that I 
just put into your hands here as samples, is on Intel 7, which 
is: Your chart is now out of date, we are in production on our 
7 nanometer products.
    You know, this is 25 billion transistors, right; which you 
know, just is mindboggling the progress that that has made. And 
as we think about application usages, like in autonomous 
vehicles, the most advanced AI applications, right, vision 
detection, and you know, being predictive on management of 
driving, the most advanced mRNA sequencing capabilities, speech 
recognition capabilities, of the AI applications across 
numerous industries.
    You know, 5- and 6G connectivity, all of these depend on 
the most advanced technologies available. They need the highest 
performance computing at the lowest power capabilities to 
process these most advanced algorithms. We predict that by the 
end of the decade, we will have our first trillion transistor 
chip, right.
    And those kinds of capabilities are for many of the 
immersive experiences of the future that will define the future 
competitiveness of industries globally.
    The Chair. Mr. Feight? What do you need, Mr. Feight from 
them? What do you need them to keep doing that in--as it 
relates to next-generation technology for your trucks and 
efficiencies?
    Mr. Feight. Sure. I think Mr. Gelsinger spoke well on the 
high technology end of some of the needs we have for vehicles 
that are fully electric, or zero emissions, if you are using 
hydrogen fuel cells. Or in autonomy where visual graphics are 
so important, and machine learning is so important, we need 
high-end chip.
    But we also, as the industry, the agricultural, the 
automotive, the truck, many other industries, need some kind 
of, I will call it more standard chips that keep affordability 
at the right level, and performance at the right level to make 
all the cars, trucks, tractors that we need in this country.
    And so they shouldn't be left behind in that thinking. It 
can't have a lifecycle of two to 3 years, otherwise the cost of 
the products will go up incredibly if we are forced to redesign 
cars, trucks, and tractors, medical equipment that quickly. So 
it is kind of at both ends, Senator Cantwell.
    The Chair. Thank you so much. My time has expired, but I 
think if Mr. Thune isn't--if Senator Thune isn't available, 
then I think it is Senator Moran.

                STATEMENT OF HON. JERRY MORAN, 
                    U.S. SENATOR FROM KANSAS

    Senator Moran. Thank you, Chairwoman. Thank you, Ranking 
Member, and our witnesses today, for joining us.
    According to a report issued by the Semiconductor Industry 
Association: Less than 5 percent of the global manufacturing 
share for packaging, assembly, and testing is done onshore, is 
done onshore in the United States. We have companies certainly 
in Kansas and across the United States, I think, that are well 
positioned, I know are well positioned to increase the capacity 
alongside chip fabricators, like Intel and Micron, to address 
shortage issues for the automotive and other industries.
    I would ask all three of you can: you comment on the 
importance of having the CHIPS Act investment address the post-
fabrication, or downstream part of the semiconductor supply 
chain, to reduce the supply chain and security vulnerabilities?
    Mr. Gelsinger. Yes. Overall, the indications are exactly, 
as you say. That package assembly test, which is generally more 
dependent on low labor cost, has even drifted more aggressively 
to Asia. We believe it is critical to restore the integrity of 
the entire supply chain, including advanced packaging, assembly 
test in America, or at a minimum, in North America.
    You know, pieces of the CHIPS Act, specifically, are 
designed in this area of advanced packaging capabilities. Our 
objective would be an entire reshoring of the complete supply 
chain, not only including package assembly tests, but also many 
of the subcomponents, key minerals, et cetera, all being 
brought back to U.S. soils. We believe we need a geographically 
balanced, resilient supply chain for the future, starting with 
the fabs, the most important thing, but it must also comprehend 
the entire supply chain.
    Senator Moran. Anyone have anything to add to that?
    Mr. Mehrotra. Yes. I would add that, of course, leading-
edge investment--investments in leading-edge technology are the 
most important, tremendous opportunity to innovate, to 
differentiate, and to really open up new applications. Of 
course, priority should be on leading-edge wafer manufacturing 
as part of CHIPS Act, as well as investment tax credits, both 
are essential to ensure America's leadership in semiconductor 
R&D and manufacturing. But certainly, aspects of advanced 
packaging should also be emphasized as part of the overall 
development.
    I want to highlight here, why investment in leading-edge 
technology is so important. If you go back to Chair Cantwell's 
earlier question regarding importance of advancing technology, 
let me take you back to early 1990s, when NAND technology was 
taken from the labs into high commercial production. Since then 
the cost has come down of technology, advancement of 
technology, by more than 10 million times.
    This is what has unleashed tremendous innovation, that 
memory is today being used in data centers, to smart phones, to 
PCs, to consumer devices, to electric vehicles in the future, 
and to continue to unleash innovation, to continue to provide 
what technology has delivered, and how it has become the 
backbone. Leading-edge technology is really, really important, 
and as part of that leading-edge memory, which is what Micron, 
as the only company in the U.S. developing and manufacturing 
semiconductor memory here in the U.S., it is really in 
important to emphasize this piece as we go forward to bring 
more leading-edge memory technology onshore.
    Senator Moran. Right.
    Mr. Mehrotra. And these investments, with the support from 
the government, and CHIPS, and investment tax credits, not only 
support specific companies, and bringing manufacturing onshore, 
they create tens of thousands of jobs, hundreds of thousands of 
jobs over the period of time as well.
    Senator Moran. Mr. Mehrotra, thank you. I am going to try 
to get a second question in. Before I had to leave for a 
moment, I heard the importance of research. Where is the 
funding sources, Federal funding sources that seem to be either 
available or missing? What is the natural kind of opportunity 
we have to support research in the United States to keep the 
technology at its latest advancements?
    Mr. Gelsinger. Yes, generally, you know, the research 
efforts are across, you know, our academic communities, largely 
National Science Foundation and DARPA have been two sources of 
sustained government partnerships. We have seen the role of 
governments funding research to drop dramatically, into the 
semiconductor industry over the last several decades.
    And really that was the seed corn, right, per my earlier 
testimony that has enabled this industry to emerge. So we 
believe that those research dollars need to be those long-term 
material, science, chemistry, creating the future done largely 
through the academic institutions, the establishment of the 
National Semiconductor Technology Center, and the CHIPS Act, as 
well as the Advanced Packaging Technologies, are just great 
venues to reestablish that kind of focus for the future.
    Something that is well established in foreign efforts, we 
see those in Europe, we see those in Asia, and we have lost 
that focus in the U.S.
    Senator Moran. Mr. Gelsinger, I am an appropriator for 
DARPA, I am an appropriator for NSF; I am the lead Republican 
in that regard, these issues matter to me. And just as an 
opportunity for you and others, and we have increased the 
funding for research. Where it is being spent is not 
necessarily determined by us, but by those agencies.
    Mr. Gelsinger. Mm-hmm. Yes.
    Senator Moran. But if there are opportunities that I can be 
of help, that our subcommittee can be of help to attract the 
attention necessary to the importance of research in this 
field, please reach out to me.
    Mr. Gelsinger. I would cherish the opportunity to spend 
more time with you on that topic.
    Senator Moran. Thank you.
    The Chair. Senator Markey.

               STATEMENT OF HON. EDWARD MARKEY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Markey. Thank you, Madam Chair. As we consider the 
$52 billion in taxpayers' money to subsidize the chip 
manufacturers, we can't ignore the environmental impact of this 
manufacturing. We need to obviously have a plan in order to 
deal with all of those issues, so that we are ensuring that we 
reduce greenhouse gases, that we reduce carbon in the 
atmosphere.
    So my question would be: I know that Lam Research has 
committed to carbon neutrality by 2050; that is an important 
step, but it is not enough, you must get to net zero across all 
greenhouse gas emissions, and to the other witnesses; will you 
commit that your companies will reach net zero by 2050? Mr. 
Gelsinger.
    Mr. Gelsinger. Yes. We will be shortly describing a 
detailed plan to accomplish net zero by 2040, and we are laying 
out a more aggressive plan to, you know, be RE100 in 2030, net 
zero by 2040. We have also been widely recognized----
    Senator Markey. Is that all greenhouse gases?
    Mr. Gelsinger. Yes.
    Senator Markey. OK.
    Mr. Gelsinger. Yes. And we have also been widely recognized 
as a company for our leadership work in areas like water 
reclamation, you know, minimizing of hazardous gas and 
chemicals, as well as our overall efforts in sustainability, 
something we have received numerous awards for on a yearly 
basis now for many decades.
    Senator Markey. Great. So next, sir?
    Mr. Mehrotra. Micron has a strong program and emphasis on--
--
    Senator Markey. Will you make that commitment? Will you 
make a commitment to reduce down to zero greenhouse gas 
emissions by----
    Mr. Mehrotra. In the long term, we absolutely will be 
getting----
    Senator Markey. In the long--and the ``long term'' is which 
year?
    Mr. Mehrotra. We have a program in place regarding, and 
investments being made----
    Senator Markey. No. But which year are you----
    Mr. Mehrotra. We will soon be announcing that. We have not 
yet laid out the year, but we are making strong progress with 
respect to greenhouse gas reductions, waste management.
    Senator Markey. Right.
    Mr. Mehrotra. Water recycling, as well as renewable energy 
usage.
    Senator Markey. Right. Which is admirable, but we need 
dates. We need commitments.
    Mr. Mehrotra. We are absolutely aggressively----
    Senator Markey. If Intel can make these promises, we expect 
you to make the same promises.
    Mr. Mehrotra. Absolutely.
    Senator Markey. I just want to say that to you. And we are 
going to hold you to it, and you will hear from us if you 
don't, if you don't do that.
    Mr. Mehrotra. Absolutely.
    Senator Markey. This is a bargain, OK. We can do both at 
the same time. We can compete on the one end, and also show the 
rest of the world that you can reduce greenhouse gases.
    The Chair. Senator Markey, I just want them to produce 
enough chips so we can electrify all our transportation sector 
right now, is what I would hope. But I do agree, hold some 
goals out here. That is great.
    Senator Markey. Right. Well, they should be the model. OK. 
We can't expect the rest of the economy to be efficient if the 
industry that prides itself on providing the technology to make 
us efficient cannot do it. OK. So they should be able to square 
that up in terms of their own corporate agenda.
    And onto water usage, the production of semiconductors 
requires millions of gallons of water per day. Semiconductor 
companies' water usage is skyrocketing. Intel and Micron both 
use approximately 14 billion gallons of water in 2020, chip 
manufacturers must work to restore water to their local water 
systems so that they are replacing the water they use with an 
equal amount of clean water.
    I want to acknowledge Intel for pledging to be net positive 
on water usage by 2030. Mr. Mehrotra, can you make the same 
commitment?
    Mr. Mehrotra. We actually in Boise, Idaho, have a program 
in place with 75 percent reduction in water--waste water 
improvements with 75 percent. And we have, absolutely, programs 
in place. And I wanted to also highlight to you that we have 
made commitment to be investing over a billion dollars over 
five to 7 years in programs related to sustainable operations. 
Again, related to all aspects, including water, water 
recycling.
    Senator Markey. Can you, can you commit to being net 
positive on water usage by 2030, Mr. Mehrotra?
    Mr. Mehrotra. So we, again, have timelines outlined in our 
reports that we publish on sustainability on an annual basis. 
And we are absolutely committed to continuing to make 
improvements in these areas.
    Senator Markey. OK, well, there is an old saying, ``To 
those who much is given much is expected.'' So a lot is going 
to be given to the industry by the Congress, and we have high 
expectations for you to be the model. So we will be looking 
very closely at the commitments that you are making, because it 
is critical that we solve the supply chain problems, there are 
increasing prices and harming consumers.
    But we have to do it simultaneously, while solving the 
climate crisis, and ensuring that the environment is not 
collateral damage, or just something that is an afterthought. 
And that has historically been the case. So we just want to let 
you know that we will want you to----
    Mr. Mehrotra. And Senator, I want to highlight, it is a 
priority for us. We publish a sustainability report on an 
annual basis, our milestones and our goals are outlined there. 
And you will hear more about this, in terms of specific goals 
coming from us, and higher, and ambitious targets in this 
regard soon.
    Senator Markey. OK. The sooner, the better, and the higher, 
the better; OK. So we look with----
    Mr. Mehrotra. We are aligned.
    Senator Markey.--anticipation to your announcement.
    Mr. Mehrotra. We are aligned on these goals.
    Senator Markey. Thank you.
    The Chair. Thank you, Senator Markey.
    Senator Scott.

                 STATEMENT OF HON. RICK SCOTT, 
                   U.S. SENATOR FROM FLORIDA

    Senator Scott. First, I want to thank Chair Cantwell for 
hosting this important hearing. I want to thank each of you for 
being here. My background is, I ran companies, I build 
companies, I start companies from scratch. And so I learned 
pretty early that, if you didn't get a return on investment, 
you didn't do very well. Also as a business person, you try to 
look at what is going on around the world, and one thing I 
would be focused on today if I did business in Communist China 
is to look at what is happening in Russia right now, where the 
American public is furious with what is going on with Ukraine. 
We are expecting our American companies to stop doing business 
with Russia. So if I was doing business with Communist China 
today, I would be concerned that the same thing will happen 
when Communist China decides to invade Taiwan.
    So first, Mr. Gelsinger, I want to talk a little about 
Intel. The company is clearly doing well. You are one of the 
top 10 most-profitable companies in America. You are the 
world's second-largest semiconductor producer, and last year 
you made $20 billion in income with a 25 percent profit margin.
    I think everybody in business in the world would be very 
proud of that. Those are great numbers. You also invested $25 
billion last year, including some chip making expansion. Thank 
you for your expansion, which should have been in Florida, but 
your expansion in Arizona and Ohio.
    So I am a business guy. I like the fact people are 
investing. When speaking about billions of dollars in Intel's 
new capital investments last year, you said, quote, ``It does 
not depend on a penny of government support, or state support, 
or any other investments to make it successful. We are making 
these commitments without any commitments from the government 
to accelerate them.''
    But what is interesting is, you have completely changed 
your tune recently. You are also quoted as saying, ``Let us not 
waste this crisis,'' in regard to receiving taxpayer handouts, 
which should scare all of us. This is on top of your company 
apologizing to Communist China for the U.S. sanctions on the 
Xinjiang region, where the Chinese Government is committing 
genocide on the Uyghur people.
    Look, I am a business guy. I have heard countless pitches 
for capital. Here is my question for you. Number one, I feel 
like we are fiduciaries for the American taxpayer. They give us 
their dollars; they want to make sure those dollars are spent 
well. So tell me, if we put this, all this money in, and my 
understanding, your company will get $4 billion, if we put all 
this money in, how does the American taxpayer get a return?
    On top of this, why wouldn't you, as the CEO of a company 
doing significant business in China, be scared to death of what 
is going on now with whether it is the Uyghurs, stealing the 
basic rights of Hong Kong citizens, harvesting organs of 
prisoners, and then you watch what has happened in Russia, 
knowing that American public is going to be furious with a 
company that still does business with Communist China if they 
continue to do those atrocities, and then invest in Taiwan?
    So give me your pitch about: Why, as an American taxpayer, 
we get a return? And two, why your company isn't putting even 
more money into America, and other allies to get away from 
Communist China?
    Mr. Gelsinger. Thank you, Senator Scott, for those 
thoughts.
    First, I want to emphasize that we are putting our chips on 
the table. I have lowered our profitability by 600 basis points 
this year. I have made the company free cash-flow negative for 
the first time in three decades. I have doubled our capital 
investments all to the howls of Wall Street. We are investing 
heavily in rebuilding Intel, but American leadership in this 
critical industry. I want to go bigger and faster. That is what 
the CHIPS Act will enable us to do. Go bigger, and faster, and 
invest for the long term.
    Senator Scott. Let us go to the return for our taxpayer. We 
are all fiduciaries for taxpayers. I am glad that Intel is 
doing this. It sounds like it will be a great investment for 
Intel, getting a bunch of Federal money. Tell me how I get a 
return for an American taxpayer?
    Mr. Gelsinger. These are extraordinary industries that are 
leveraged across every other industry. Every job we create 
creates on average, greater than 10 other jobs, the work that 
we have done in Arizona and Oregon.
    Senator Scott. Are you going to report on that?
    Mr. Gelsinger. You know, and Senator Wyden was----
    Senator Scott. Excuse me. Excuse me. You have a report that 
shows me that--the thing about it, I am a fiduciary for 
taxpayers.
    Mr. Gelsinger. Yes.
    Senator Scott. So you are saying it is going to create ten 
more jobs for every?
    Mr. Gelsinger. On average it has been well publicized in 
our sites in Oregon and Arizona, it is what was put forward for 
the investments around Ohio. These are incredibly leveraged 
industries.
    Senator Scott. And that is great. How does that turn into 
cash for the American taxpayer?
    Mr. Gelsinger. Right. Creating jobs across the supply chain 
in manufacturing, in construction, our Ohio site is creating 
3,000 new jobs, 7,000 new construction jobs, and it is----
    Senator Scott. How much money does the American taxpayer 
get? You asking for $4 billion for your company. What return 
does American taxpayer get for that? How much? So you invest 
these dollars, you are going to make money, I assume, you are 
not doing it if you didn't make money. How does an American 
taxpayer get a return?
    Mr. Gelsinger. These jobs would drift to other areas. We 
want them on American soil. They create jobs that are tax-
paying, great jobs. And we are happy to go into more detail 
with you, Senator Scott, right, on all of the reports and data 
that we have done. But these are seen as some of the most 
lucrative job-creating, tax-producing, you know, industry and 
community creating jobs in America.
    Senator Scott. Let me just finish that. So I am a CEO. I 
ran companies. We had to get a return. We had to pay our banks 
back, we had to get a return for our shareholders. As Governor 
of Florida, we did probably a thousand economic development 
deals. I could tell you, I got on an average ten times my money 
back. So it sounds really nice, but I have never seen one 
report that says I will ever get a dime back if you get $4 
billion.
    Mr. Gelsinger. Well, every dollar----
    The Chair. Senator Scott, I think we have got to move to 
our next witness. But in this, I am just looking at the written 
testimony. So I guess you could say that is a submission to 
Congress, and in Intel's written testimony, California annual 
economic impact from Intel's $24.9 billion, Oregon is $19.3 
billion in annual impact. Arizona is $8.6 billion in annual 
impact. So New Mexico is $1.2 billion in annual impact, Texas 
doesn't have the exact number there, and Massachusetts.
    So I think the issue is $52 billion from us, and we have a 
long way to go in this process, but I think you are going to 
see that it is about building that ecosystem. And I do think 
you will see annual revenues that will--I think that 
clarification to Mr. Gelsinger's statement was that they are 
going to Ohio, no matter what, and building. The question is, 
could they expedite and build more? And if CHIPS passes, they 
are likely to do that acceleration, so anyway. Senator 
Klobuchar.

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Very good. Thank you very much, Chair 
Cantwell, and thank you for holding this hearing. Thank you to 
all of you. It is a nice break from judiciary, honestly. There 
is just a little thing going on in the other hearing room.
    I wanted to start with you Mr. Gelsinger, and Mr. Archer, 
on the subject of workforce shortage, I am obsessed with this. 
My state has a really low unemployment rate, which is a great 
problem to have, but we have 18 Fortune 500 companies somewhere 
in that range.
    And I believe the answers are broad. The answers are, of 
course, immigration reform, lifting visa caps, workforce 
permits, but also apprenticeships, and one-and 2-year degrees. 
And Senator Moran and I have a bill, which was included, 
actually, in the America COMPETES Act over in the House, which 
would allow workers to earn college credit for completed 
apprenticeships, creating a pathway for workers to gain skills. 
Can you talk to the role of public-private sectors working 
together on this angle of workforce shortages?
    Mr. Gelsinger. Yes. We are extremely proud to be 
partnering. And in fact, just last week we announced $100 
million partnership with NSF for job creation, primarily in the 
Midwest around our Ohio site announcement. This builds on a 
long history of public-private partnership and job creation. 
You know, we are making strong advancements in areas like 
underrepresented minorities, and females in technology, strong 
investments in STEM.
    I personally am a product of the community college system, 
a farm boy from Pennsylvania, who is now leading one of the 
most iconic companies in American history. I deeply believe in 
these principles.
    We have also seen that we have launched our AI for the 
Future Program, specifically aimed at community colleges. Many 
of our workforce are hired, you know, with no or minimal 
technology education. And we provide that in partnership with 
many of the local community colleges as well. This is core to 
our future.
    Senator Klobuchar. OK. Thank you. My dad went to a 
community college, as did my sister. So thank you.
    Mr. Gelsinger. Yes.
    Senator Klobuchar. Mr. Archer, quickly, because I have 
another question.
    Mr. Archer. Sure.
    Senator Klobuchar. Thank you.
    Mr. Archer. Well, I think as Mr. Gelsinger said, it is 
important to the industry. We think about chip shortage and 
many of the bottlenecks to recovering from this, one of them is 
the tight labor market that we face today.
    Senator Klobuchar. Mm-hmm.
    Mr. Archer. Not only companies like Lam Research, but also 
in the hundreds of American suppliers that we depend on. And 
those suppliers are spread across 37 different states and they 
are feeling the pain of, not enough workers to fill these high-
skilled jobs. So we are very supportive of any type of 
government program that helps to bolster, yes.
    Senator Klobuchar. And immigration reform.
    Mr. Archer. And immigration reform.
    Senator Klobuchar. OK. Very good.
    Mr. Archer. Of course, that is important for us in 
California as well.
    Senator Klobuchar. Exactly.
    Mr. Archer. Yes.
    Senator Klobuchar. All right. Mr. Mehrotra, I know Micron 
employs 110 people in Minnesota, who design chips. Thank you 
for that. Not who is counting, but I am. I also visited 
SkyWater in Bloomington, Minnesota, in fact, the President at 
one point held up one of our Minnesota chips, which produces 65 
and 90 nanometer chips. Can you talk about the importance of 
investing in U.S.-based companies in the production of 
semiconductors and innovation?
    The Chair. Turn on the mic.
    Senator Klobuchar. Yes. Say that again, in the microphone. 
Yes, that is good.
    Mr. Mehrotra. It is on.
    Senator Klobuchar. There we go, yes.
    Mr. Mehrotra. I just want to say again, that we are very 
proud of our team in Minnesota. They are absolutely leading-
edge engineers working on some of the most advanced work that 
Micron is doing. And Micron today is leading the world in 
semiconductor memory and storage technologies.
    And it is really imperative as part of Micron's 
announcement of investing more than $150 billion over a decade 
in leading-edge, semiconductor manufacturing and R&D, that we 
have the opportunity to bring manufacturing, leading-edge 
memory manufacturing onshore.
    Of course, we are here in Manassas, Virginia, manufacturing 
with nearly 2,000 team members, and investing in advanced 
memory manufacturing and storage, and supplying the markets, 
such as automotive market, defense, and industrial. But we need 
to bring more manufacturing into the U.S., and Micron is 
committed to doing it with support from CHIPS Act, and 
investment tax credits.
    As the only company in the U.S. making semiconductor memory 
and storage, we fully recognize our responsibility, and we seek 
the support from the government policies to enable us to be 
able to be part of building resilient, semiconductor leadership 
here in the U.S.
    Senator Klobuchar. OK. Well, thank you. And I will just put 
on the record a question about Senator Thune's and my Shipping 
Reform Act. I think it is really important, if we are going to 
make stuff, and invent things, and export to the rest of the 
world that you are able to ship to the rest of the world, which 
means not having empty containers, chips, and having reasonable 
rates.
    And so we are excited under Senator Cantwell, and Senator 
Wicker's leadership that the bill was marked up, and 
unanimously got through this committee just a few days ago, and 
is headed to the Senate floor. So thank you very much, all of 
you.
    The Chair. Thank you. Senator Thune, a good follow on to 
you.

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Madam Chair, for holding this 
hearing. And let me just start by saying that the United States 
remains the world leader in technology innovation. It is the 
birthplace of industries that feed the Nation's economic 
dynamism, and benefit the lives of Americans, and people across 
the world.
    It is essential that we can ensure our supply chains 
continue to innovate as well, providing them with the agility 
to respond to advances in technology, or disruptive events, 
like the COVID-19 pandemic, or Russia's war in Ukraine, which 
is why I have worked in a bipartisan manner, and as Senator 
Klobuchar mentioned, with her and Senator Wicker, on 
legislative solutions like the Ocean Shipping Reform Act and 
the FREIGHT Act to ease current strains, and to bolster the 
global competitiveness of U.S. products and industries. The 
effects of the semiconductor shortage highlight the importance 
of supply chains, perhaps most notably in the Nation's auto 
industry, which produces more than 11 million vehicles 
annually.
    The transformation to automated vehicles, or AVs, is going 
to place a much greater demand on semiconductors and other 
crucial products, so it is crucial that the United States 
remain globally competitive in this space. AVs will radically 
transform the way Americans move. It is especially true for the 
elderly and persons with disabilities whose current 
transportation options are limited, especially in rural areas.
    Moreover, it has potential to greatly to reduce the average 
of more than 40,000 traffic fatalities in our Nation's roadways 
each year, while American companies currently lead the world, 
Navy technology, the advantage cannot be taken for granted in 
allowing China to seize the mantle of innovation is 
unacceptable. And the U.S. must act boldly to maintain its 
position.
    The U.S. regulatory framework and our supply chains must 
catch up with private sector innovation in order for these 
technologies to advance. There are tens of thousands of good-
paying jobs, and billions of dollars in investment that are at 
stake, which is why my colleague, Senator Peters and I have 
worked together for the better part of 5 years to develop and 
enact AV legislation, a crucial component in maintaining U.S. 
leadership in this emerging industry.
    AVs have potential to once again, transform the way 
Americans move and the U.S. must once again lead the world in 
this transportation revolution.
    Mr. Feight, in your testimony, you mentioned engineering 
and innovation centers working toward the development of 
autonomous and connected vehicles. Beyond bolstering U.S. 
technological competitiveness through investments in supply 
chains and domestic industries, what do you believe Congress or 
the Department of Transportation can do to encourage the 
testing and deployment of AVs?
    Mr. Feight. Well, first of all, Senator Thune, thanks for 
the comments. I think you are right on with the opportunities 
of what AVs can bring to our country and the world, and I think 
that it is nice that we are, in America, the leader in the 
technology. And as PACCAR, that we are partnered with leaders 
in the technology, with Aurora, with Waymo, Kodiak, Embark, and 
others in our development efforts.
    So I think that what we really need is the clear vision of 
what will be allowed from a legislative standpoint. And that we 
are going to need to clarify what the judicial requirements are 
going to be in terms of liabilities as we move forward.
    Right now, the industry is in a really good spot in 
developing level four autonomy, and we are moving it forward. 
It needs to be done safely. That is the most important thing. 
Safety has to be the most critical factor, and we will continue 
to focus that way. And then we will develop capability over a 
period of time when it is safe, in certain corridors, and those 
corridors need to be clearly identified.
    And then we just need to have a general knowledge sharing 
between government and industry on how we make sure that we 
roll this out in an effective way. So I think it is a dynamic 
conversation that we are happy to engage with on an ongoing 
basis.
    Senator Thune. Thanks. Mr. Gelsinger, given Intel's work in 
this space, do you have anything to add on promoting the 
domestic development of AVs?
    Mr. Gelsinger. Yes. Clearly this is an area that the world 
is moving rapidly. We find some of the regulatory policies in 
other parts of the world are more favorable now, and some of 
those nations are moving ahead more rapidly. So we do believe 
this is an area that requires much more active positioning.
    Our Mobileye Division is one of the clear leaders in the 
world in this area. And right now we are seeing far more 
progress on other portions of the world in deploying AV 
vehicles for both commercial fleets, as well as consumer 
fleets. Much of the technology is being developed here, but the 
deployment is actually being led at other places in the world. 
Time to act; this is urgent if you want to stay ahead.
    And I would also emphasize that AV is one of the most 
advanced uses of AI capabilities, requiring the most advanced 
semiconductor technologies as well. So it reinforces the heart 
of this hearing today. We need the most advanced 
semiconductors. Today the auto is about 4 percent 
semiconductors.
    It is estimated to be 20 percent semiconductors, five-X 
increase by the end of the decade. So the dependency on 
semiconductors for these advanced areas, like AV, is absolutely 
essential for the auto, and trucking, and transportation 
industry of the future.
    Senator Thune. Thank you. Madam Chairwoman, my time has 
expired. I have got a question on 5G that I will submit for the 
record, but thank you.
    The Chair. Thank you, Senator Thune. I saw Senator Tester 
earlier. He would be next if he is available. If not, we will 
go to Senator Baldwin. Senator Baldwin.

               STATEMENT OF HON. TAMMY BALDWIN, 
                  U.S. SENATOR FROM WISCONSIN

    Senator Baldwin. Thank you, Madam Chair. And like my 
colleague, Senator Klobuchar, I have been jumping between 
committees. So it looks like I missed a show and tell at the 
beginning. But I will wait until after the hearing to catch up 
on that.
    I also want to chime in, along with my colleagues about 
restoring American leadership in semiconductor manufacturing, 
that Wisconsin would make an ideal location for some of that 
expansion, just planting that seed.
    But as we are well aware, right now Congress is on the 
brink of putting together a conference committee to advance the 
variously named competition bill, and I hope that we will do 
our jobs without delay. But during the debate over the CHIPS 
Act many pointed out the generous incentives provided by 
foreign governments to domestic manufacturers.
    However, few have noted the different spending priorities 
of foreign competitors, particularly on the issue of stock 
buybacks. For example, over the last 20 years looking, you 
know, at that time horizon, Intel spent about 64 percent of its 
net come on buybacks. A whopping $127 billion, while Samsung 
spent only 10 percent, and Taiwan semiconductors spent 2 
percent.
    So as a supporter of the CHIPS Act, I want to ensure that 
the Federal Government gets a proper return on its investment, 
namely, an increase in the domestic semiconductor manufacturing 
base. And as such, I would like to ask each of the 
semiconductor manufacturer witnesses to briefly describe your 
spending plans for the next few years, and explain how you 
envision chips funding, potentially, fitting into them. And if 
I could start with Intel? Mr. Gelsinger.
    Mr. Gelsinger. Thank you. I came to the role as CEO 
slightly over a year ago. I ceased our buyback policy 
immediately upon my arrival. I laid out to Wall Street, a 
radical increase in our capital expenditures, more than 
doubling them, taking the free cash-flow of Intel negative for 
the first time in over three decades, reducing our 
profitability by 600 basis points, more than doubling our long 
term capital investments, and indicating to the Street that I 
expected to see that level only increase for the rest of the 
decade.
    This is the largest capital build out, probably done by any 
company in any industry in history. The majority of that will 
land on American soil, but I do not believe that is enough, and 
I can't do it myself. The CHIPS Act is intended, from my 
perspective, to enable me to go bigger and faster than the bold 
commitments that we have already made that have reached, you 
know, very negative response from Wall Street.
    We want to do more and faster. This is all about restoring 
U.S. competitive, bringing back this mantle from Asia on a 
critical industry, not only for our economy, but also our 
national security. We are all in.
    Senator Baldwin. Thank you. Mr. Mehrotra.
    Mr. Mehrotra. Senator Baldwin, as I highlighted earlier, 
Micron is the only company in the U.S. that manufactures 
semiconductor memory and storage. And semiconductor memory and 
storage represents 60--nearly 60 percent of the worldwide wafer 
production. And we are the only company here manufacturing and 
developing leading-edge technologies. Today, we are the global 
leader in technology for DRAM and NAND, ahead of all other 
global competitors in developing that technology and putting it 
into production.
    We have done so by making billions and billions and tens of 
billions more than that investments over the course of the last 
few years in leading-edge R&D, and investments in 
manufacturing. We will always prioritize our investments in R&D 
and manufacturing to be able to secure leadership for Micron in 
semiconductor memory technology, and to be able to meet the 
growing needs in this world of data economy, for more data 
solutions, which we make, memory and storage solutions.
    So that will always be our highest priority. As part of 
that, we have announced in October of last year, that over the 
decade, we will be investing more than $150 billion in leading-
edge R&D and manufacturing. So that is the priority to continue 
to drive innovation, to continue to invest in R&D, to continue 
to support the manufacturing. That is our plan. And that is our 
focus.
    Senator Baldwin. Mr. Archer.
    Mr. Archer. Yes. So Senator Baldwin, we manufacture the 
machines that are used to make the chips. And so our priorities 
for the future is the same as they have been the last couple 
years, which is to expand our capacity, nearly 70 percent of 
our manufacturing capacity is in the U.S. We spend about 90 
percent of our R&D in the U.S., last year it was at $1.5 
billion.
    Our priorities for the future are just to continue to 
invest, to accelerate innovation in support of the domestic and 
global semiconductor manufacturing industry, in order to try to 
alleviate many of the global shortages that we have seen in 
chips. They are affecting so many different industries. And so 
we are--we are going to just continue to invest and to maintain 
our leadership in this space.
    The Chair. Thank you, Senator Baldwin. Senator Warnock.

              STATEMENT OF HON. RAPHAEL WARNOCK, 
                   U.S. SENATOR FROM GEORGIA

    Senator Warnock. Thank you so very much, Madam Chairwoman. 
Whenever I am back in Georgia, I hear about the rising costs 
for families, and I am deeply alarmed by how the global 
semiconductor shortage is behind many of those rising costs in 
the automobile industry. We have seen costs increase for new 
cars by 11 percent, 37 percent for use cars.
    Almost everything relies on semiconductors, not just cars, 
but cell phones, washing machines, which means that due to this 
chip shortage families have faced sharp increases in the cost 
of computers and cell phones, which they need for work and 
school, and many other products.
    Mr. Gelsinger, yes or no; do you agree that the 
semiconductor shortage has likely contributed, at least in 
part, to higher prices of things that families rely on, like 
cars, computers, and washing machines?
    Mr. Gelsinger. Yes. I agree.
    Senator Warnock. In fact, rising costs, don't just hurt car 
buyers, thousands of workers like those at the Kia plant in 
West Point, Georgia, which had to shut down a couple of times, 
and have been affected by the shortage. And that is why last 
May I proudly supported Federal funds to increase domestic 
semiconductor production. I was proud to work with Senator 
Peterson on that issue, when the U.S. Innovation and 
Competition Act went through committee this last May. And I 
supported it again when the House recently passed the America 
COMPETES Legislation.
    Mr. Gelsinger, do you also agree that providing additional 
resources to the CHIPS for America Fund would help alleviate 
the semiconductor shortage.
    Mr. Gelsinger. Yes. I believe it would. It takes time to 
build new factories. So, you know, the urgency associated with 
this is critical, but unquestionably this will help to 
alleviate the shortages mostly in the medium and longer term, 
but immediately helping is a very positive step. We have 
already wasted several quarters since the Senate acted last 
year. And now it is time for us to move forward rapidly.
    Senator Warnock. I agree. I think it is past time. And that 
Congress move immediately and pass this funding that the 
President needs to sign into law. Now, related to the 
semiconductor issue, America of course needs a robust 
semiconductor workforce that reflects the diversity of the 
Nation. As Congress makes investments in domestic semiconductor 
manufacturing, we must make sure that we have the benefit of 
all of our talent, that we ensure that businesses are doing 
what they can to make semiconductor jobs more accessible, and 
attract partners from underrepresented communities.
    I am a graduate of an HBCU, I would argue the greatest of 
all, Morehouse College. But I have long been a champion for all 
of our HBCUs, which have been punching way above their weight, 
doing so much, for so many, for so long, with so very little 
resources.
    I am proud to have fought for $1.2 billion in funding in 
recent--in the recent competition package to support research, 
capacity building at HBCUs, and MSIs, including for 
semiconductor-related research. And I also recently sent a 
letter with Senator Padilla supporting a provision in the 
America COMPETES Act that would create an office of opportunity 
and inclusion at the Department of Commerce to develop 
standards that will help expand opportunities in the 
semiconductor industry for traditionally underrepresented 
individuals.
    So I want to ask each of you: As industry leaders, would an 
office of opportunity and inclusion support the semiconductor 
industry's efforts to attract more women, more people of color, 
and rural workers; and do you see this as essential to the 
work? Mr. Gelsinger.
    Mr. Gelsinger. Yes. I would say whether we have the office 
or not, we are deeply committed to these topics. You know, and 
we have been increasing our underrepresented minorities, and 
our female workforce. We set a goal to have 40 percent females 
by 2030, part of my selection of Ohio, right. And our recent 
education initiatives that we just announced last week for $100 
million investment were specifically because of increasing our 
minority and female workforce. We would love to discuss this 
topic with you more deeply.
    Senator Warnock. Do you think having an office might 
encourage others similarly positioned to make a similar 
commitment?
    Mr. Gelsinger. We certainly could, and we would look 
forward to that conversation with you.
    Senator Warnock. Mr. Mehrotra? Sorry, I hope I didn't 
butcher your name.
    Mr. Mehrotra. No. You didn't. Thank you. Senator, we are 
well aware of your and Senator Padilla's letter regarding 
Office of Opportunity and Inclusion in the Commerce Department. 
I would like to highlight that Micron has been a strong 
proponent. It is a core value of Micron to promote greater 
diversity and to increase representation of minorities within 
Micron.
    We publish a diversity and inclusion report, we call it 
``For All'' every year, and this report highlights our key 
initiatives, in terms of increasing representation across all 
diverse groups, in terms of pay equity, not only in terms of 
gender pay equity, but pay equity not only for salary, but for 
bonuses, and stocks, for all underrepresented groups in the 
community, focus on engaging with minority-based suppliers as 
well.
    So we have--and putting our cash, investing it with those 
that represent minority institutions in terms of financial 
institutions. So we have several initiatives, we report our 
progress. Our values are very much aligned with promoting 
greater opportunity and inclusion, and we continue to be strong 
supporters.
    Senator Warnock. So you would--you would support such an 
office, and you are pledging your own commitment to make sure 
people of color and women are represented, and provided access 
to employment opportunities. Mr. Archer.
    Mr. Archer. Yes. Also at Lam Research, this is an 
incredibly important topic and, and therefore, we are 
supportive of any activities that can help us expand the 
workforce in the United States including tapping into diverse 
work groups. One of the things that we are most proud of is we 
partner with organizations like the National GEM Consortium, 
which has members, many of which are the HBCUs.
    And what we promote is trying to help students pursue 
advanced degrees, masters' and PhDs in science and engineering, 
so that they can build meaningful and long-lasting careers in 
companies like ours, and others throughout the semiconductor 
industry.
    Senator Warnock. Thank you all so much. I look forward to 
working with industry leaders to increase semiconductor 
production in our own country, and that we make good use of all 
of our talent.
    Mr. Mehrotra. And Senator, I just wanted to highlight to 
you that we recently opened a center in Atlanta, Georgia, and 
we are engaged with the HBCUs there as well. And the purpose of 
this design center that we have opened there, where we will be 
recruiting 500 engineers over the course of the next few years, 
is really to, again, tap into outstanding, diverse talent that 
exists in the region.
    Senator Warnock. Thank you so much.
    The Chair. I don't see Senator Fischer or Young. I know 
Senator Young said he was coming back, but we will just keep 
going on our side. Senator Peters.

                STATEMENT OF HON. GARY PETERS, 
                   U.S. SENATOR FROM MICHIGAN

    Senator Peters. Well, thank you Chair Cantwell. And thank 
you for convening this incredibly important hearing, and great 
to have the witnesses here as well.
    As we see on our desk here, these semiconductor chips can 
be small as a fingernail, but we know that these tiny devices 
have absolutely enormous impact across the economy and our 
society. And certainly a clear example is the auto industry, 
something I am very close to as a senator representing the 
Great State of Michigan.
    And I know that before the 1970s, cars simply didn't have 
any chips, a very few, then started having a handful of chips 
to deal with just kind of the engine functions, and make that 
work a little smoother. And then in a few span--or a few years 
later, cars relied on chips for just about everything. From 
safety devices, to things like power windows, instead of that 
crank there, it is a chip that allows us to do that.
    They have basically become ubiquitous, and some cars or 
vehicles now have over a thousand chips in them. And in light 
of this trend, it is no surprise that the pandemic contributed 
to a global chip shortage. And when that happened it hurt auto 
production, and auto workers, particularly hard.
    As we look to the future, chips are going to play an even 
more important role in mobility, as they are essential, as I 
think was discussed earlier, for both electric vehicles, as 
well as autonomous vehicles, which represents the future for 
the auto industry. That is why I am excited to chair a hearing 
in Detroit this coming Monday, and we are going to examine the 
role of semiconductors in the future of automotive innovation.
    And I certainly believe it is essential that we make our 
semiconductor supply chains as resilient as possible, not just 
efficient, but highly resilient to--and I think my state of 
Michigan is particularly well positioned to lead this effort. 
Not only will this grow jobs and economic activity in the 
semiconductor industry, it will also strengthen the entire 
economy, especially when it comes to, not just cars, but all 
products that use these chips.
    So Mr. Mehrotra, as you know, and as you have mentioned 
cars are becoming increasingly electric and autonomous, and 
Michigan is certainly leading the way in the manufacture of 
these vehicles. But automakers in Michigan are also going to 
require more in sophisticated semiconductor chips as we move 
forward, not just the legacy chips we have now, particularly 
when it comes to memory and to storage.
    Indeed you described the vehicles earlier as a future data 
center on wheels, which is basically, clearly, what they are 
now and, will increasingly be. This is just one reason why I 
expect that Michigan is going to be a significant player, we 
are a major manufacturing state, home to many other industries 
that see their products more integrated with chips, from 
medical devices, to defense applications.
    Michigan's future with the semiconductor industry is also 
rooted in world-class universities and training programs, which 
prepare workers for these roles, as was discussed earlier, from 
R&D to making cutting-edge products.
    Simply put, another plug for my state, Michigan knows how 
to make things. So it is no surprise we are seeing a major 
influx of investment around semiconductor technologies, like 
KLA operating its second headquarters in Ann Arbor. And without 
a doubt in my mind, funding for the CHIPS Act will be critical 
for growing this forward.
    So my question for you is, Mr. Mehrotra, can you discuss 
how Micron's memory and storage technologies will play a role 
in electric and autonomous cars of the future, as well as all 
of the other products we make in our manufacturing state?
    Mr. Mehrotra. Senator Peters, thank you for your question, 
and giving me the opportunity to highlight here that in 
semiconductor memory and storage, Micron has, globally, number 
one market share. So we have been strong partners to supplying 
to the automotive industry globally, and strong partners to the 
U.S. auto manufacturers.
    And during the pandemic with various supply chain, 
semiconductor supply chain shortages, we worked closely with 
automakers, and made sure, pleased to say, that we, our memory 
and storage solutions did not cause any line-down situations. 
And we continued to be a strong provider of our solutions to 
them, and will continue to maintain our number one market share 
leadership in this very important, and fast growing segment for 
the semiconductor industry.
    And we have earned this number one market share based on 
the high quality that Micron is focused on delivering to this 
industry, but also high quality that is focused on delivering 
solutions, whether in data center, or intelligent edge, or a 
multitude of user devices that are using more and more memory 
and storage.
    You are absolutely right to point out that I often say that 
autonomous vehicles are becoming data centered on wheels. 
Today, you know, they have a roadmap that will be using more 
than $750 of semiconductor--semiconductor memory and storage 
content in these vehicles more than 15 times higher than the 
standard vehicles of the past.
    So this is a tremendous opportunity, and Micron's focus on 
leading-edge technology is important. We are continuing to work 
with automakers to help them transition to the newer technology 
nodes faster because that increases the availability of memory 
supply. And in general, moving faster to leading-edge nodes, 
help increase the availability of all semiconductors, and avoid 
the kind of shortages and situations that have occurred in the 
past.
    So this is an important initiative. The partnership with 
the auto industry is important, and of course making 
investments here in the U.S. with the support of not only just 
the CHIPS Act, but also with the investment tax credits is 
critically important.
    And Micron is looking forward to having these legislations 
get across the finish line, so that with a sense of urgency, we 
can begin to play catch up in terms of bringing leading-edge 
memory manufacturing onshore.
    Senator Peters. Right.
    Mr. Mehrotra. And play catch up with Asia, which has been 
investing, for the last 20 years plus, heavily with the 
government support, in bringing their semiconductor 
manufacturing onshore.
    Senator Peters. Well, thank you. Thank you for that answer. 
Thank you, Madam Chair.
    The Chair. Senator Rosen.

                STATEMENT OF HON. JACKY ROSEN, 
                    U.S. SENATOR FROM NEVADA

    Senator Rosen. I thank you, Madam Chair, for holding this 
hearing. And I want to say, as a former computer programmer, 
when I started those disc drives were called platters, they 
were giant. We had giant rooms that had to be cooled. 
Everything was big. And now, look, the smallest thing is even 
smaller than this. It is amazing. It is lighter, cooler, 
faster, and more powerful. So thank you for bringing those.
    And I really want to talk about the semiconductor impact on 
broadband, because the shortage has far-reaching consequences 
across sectors, particularly broadband they are an essential 
part of our telecommunications network, our consumer, our 
business equipment, our modems, our routers, our gateways, our 
devices, everything depend on the chips to manage it, to 
control it, to collect our information, divert information, 
store it, whatever that is.
    And the telecommunications industry has been sounding the 
alarm on shortages impact on deployment, particularly of our 
broadband across the country. And I was a member of that group 
of 22 senators who helped draft the Infrastructure Bill 
including the state broadband grant program, the Middle Mile 
Deployment Act.
    And I know that these programs will provide critical 
funding to state and localities for reliable, high-speed 
Internet to the last mile, really our rural areas, being the 
frontier rural areas in Nevada being really adversely impacted.
    So, Mr. Gelsinger, in your talk about the impact, the 
semiconductor supply chain issues, and shortages that they have 
had in the telecommunications industry, and how are the current 
semiconductor supply chain delays. How do you think they may 
impact the Federal broadband programs, particularly those ones 
we just created with the Bipartisan Infrastructure Law?
    Mr. Gelsinger. Thank you. And, you know, first I would also 
want to point out that just 3 years ago, we were desperately 
fearful if we would have lost control of the technologies 
associated with our 5G networks.
    Today, technologies such as Open RAN, or Open Radio Access 
Network, are now opening up the 5G networks. And in fact DISH, 
Verizon, AT&T, Rakuten, are all building those on Intel-based, 
Open RAN platforms. We have solved this international crisis 
that faced us in a technology lean-forward way.
    Also the period of COVID has shown the criticality that we 
have on our broadband networks, literally overnight, right, 
every worker and every school child became an online student or 
worker, right. It was tremendous. And thus the efforts around 
building the broadband future, right, are absolutely essential. 
And we have seen the productivity benefits that result as we 
have come roaring out of the COVID economic challenges.
    That said, the future is still in front of us. And as we 
look to 5, 6G, you know, deployments of autonomous vehicles, 
not just smart cities, but also smart factories, with areas 
like private 5G and 6G, they depend on the most advanced 
semiconductor technologies. So what we are laying out here is 
literally the underlayment that is required to keep the U.S. 
competitive on the next-generation communications and broadband 
technologies.
    This is essential to every aspect of the innovations that 
we are working on for the future, whether that is autonomous, 
whether that is, you know, private and consumers, whether that 
is factories and workers, and literally to be the unquestioned 
leader at 6G and beyond, this will be supported as a result of 
the CHIPS Act.
    Senator Rosen. Well, I am glad that you mentioned this, 
because we have a lot of sectors that depend on it. And so I 
want to talk about moving on, Mr. Gelsinger, also about our 
tourism industry, because as the witnesses, as many people have 
asked about autonomous cars, or just cars in general, a huge 
chip shortage that increased demand for rental cars as we--
tourism boosts back up, we know that rental cars were sold off 
during the pandemic, new cars aren't being made as quickly. And 
of course the demand is for individuals to buy cars.
    So it is really, really hurting tourist economies like Las 
Vegas. And so can you discuss the steps you are taking to 
ensure that chips are being manufactured and distributed to all 
automakers in a matter that supports those industries critical 
to supporting tourism, such as our car rental companies? And I 
would say buses and all of those shuttle buses, vans, taxis, 
all those things that help our tourist economy in every state.
    Mr. Gelsinger. Yes. As we have already indicated in this 
hearing so far, the importance of future technologies enables 
the cars of autonomous, connected, infotainment, all of those 
aspects, but the near-term crisis has been driven more by older 
nodes, or areas that, you know, many of which has further 
emphasized the gaps that we have, and our gross dependence on 
Asian suppliers.
    You know, we have recently announced the acquisition of a 
company Tower Semiconductors that increases our ability to 
respond to these near-term challenges of the auto industry. You 
know, our priorities and the allocation of our chips have been 
to, first, the manufacturers of semiconductor equipment, help 
us fish for the future; second to the healthcare sector, and 
third to the auto sector.
    You know, we view those as the most critical sectors to 
rebuild our future. And we will continue to act in that way as 
we look to the future.
    Senator Rosen. Thank you. I appreciate your comments. I 
yield back.
    The Chair. Thank you, Senator Rosen. Senator Young, you 
would be next, if you want to go; then Senator Hickenlooper. 
Apparently that is a yes.

                 STATEMENT OF HON. TODD YOUNG, 
                   U.S. SENATOR FROM INDIANA

    Senator Young. Thank you, Chairwoman. Well, I appreciate, 
Madam Chair, you holding this timely hearing. It was nearly a 
year ago that this committee passed my Endless Frontier Act, 
now known as the U.S. Innovation and Competition Act. And we 
did it with a bipartisan vote of 24 to 4 out of this committee.
    The bill is vitally important to the future of our country. 
There is a national security imperative to advancing this 
legislation to make sure that we don't fall behind China as it 
relates to our tech innovation. This of course is, 
historically, a key driver of our economic growth, and our 
ability to defend our values, our way of life.
    American leadership in science and technology, especially 
the emerging technologies that are going to dominate the 21st 
century, will be key drivers of our economy, and our 
competitiveness with the Communist China moving forward.
    Key features of this legislation are the establishment of a 
new tech directorate, regional tech hubs across the heartland 
so we can harness the potential, and the creativity, and the 
work ethic of our individuals, and, of course, the CHIPS Act, 
which will ensure that our economy is more resilient moving 
forward.
    As I understand, at this moment the U.S. Senate is taking a 
vote to move us one step closer to, ultimately, passing USICA, 
or whatever we are calling the final work product. And I really 
look forward to continuing to work with my colleagues to see 
this across the finish line.
    In order to drive U.S. semiconductor innovation, we mustn't 
only incentivize growth in the U.S., as USICA and the CHIPS Act 
aim to do, but it is also imperative that we reduce our 
reliance on other countries throughout the entire supply chain.
    Mr. Gelsinger and Mr. Mehrotra, I am sorry, I butchered 
your name there; I couldn't help but notice in your written 
testimonies that neither of you mention China, and I am going 
to give you an opportunity to speak to a couple of questions.
    What is the current state of the semiconductor industry 
with regards to China, and where do you see the industry's 
future in China? Mr. Gelsinger.
    Mr. Gelsinger. Yes. China has emphasized the development of 
this sector on Chinese soil, very significantly. It has been 
part of every 5-year plan in China for the last two-and-a-half 
decades of this priority area. And they have made substantial 
progress in building up their semiconductor industry.
    However, given our export license control matters, they are 
significantly behind, and their position is largely in older 
nodes, and older industries, not the leading-edge technologies 
where U.S. and European capabilities are still far more 
advanced and other Asian countries are advanced.
    And thus, we believe that such practices for the future are 
important to continue the leadership that we have to be very, 
very thoughtful about, you know, being able to sell products 
there so that we are maximizing the position of our product 
revenue, but to continue to keep a substantial technology 
leadership, for our equipment suppliers, as well as our chip 
suppliers, to be able to have revenues there.
    It is the largest chip market in the world in China. So we 
need to be able to participate to become the largest companies 
in the world, even as we, be very careful to protect our 
intellectual property and leadership position.
    Senator Young. Sure. Mr. Mehrotra, do you have anything to 
add, sir?
    Mr. Mehrotra. I would just add that as China is one of the 
large markets, it is a large market not only due to Chinese 
companies using semiconductor products, but it is a large 
market due to many global businesses operating there and 
manufacturers, such as Micron, supplying product to them in 
China as well. So the China market does help provide scale that 
is important for semiconductor industry. The benefit of scale 
ultimately goes into investments in R&D.
    I would also add, as has been highlighted here earlier as 
well, that China certainly is very much recognizing the 
importance of semiconductors, certainly recognizes the 
importance of memory semiconductors, which Micron is the only 
company in the U.S. making those, and is investing more than 
$100 billion supporting their semiconductor industry.
    And hence, it is extremely important that U.S. does play 
catch up with CHIPS Act, with investment tax credits, and 
timing is of the essence. Other countries are moving forward. 
We need to catch up in this area to get a level playing field. 
And as part of level playing field, of course, other aspects of 
free market access, fair trade policies, protection of 
intellectual property. These are all aspects that are clearly 
important as well.
    Senator Young. Which is why we are advocating for this 
USICA legislation.
    Mr. Mehrotra. Yes.
    Senator Young. So thank you for affirming that. And, last, 
maybe very briefly, because my time is coming to an end. But do 
any of our panelists have concerns with our reliance on other 
countries for the rare earth mineral inputs that are used in 
semiconductor production?
    Mr. Gelsinger. The requirements are fairly modest on rare 
earth. Other areas, like batteries, and you know, some of those 
are much more significant. That said, we believe we need 
resilience in the supply chain, and this deserves a lot more 
investigation. As you say, build the fabs, restore the supply 
chain, and work through all of the other elements that would 
feed that supply chain. That is the formula for our long term 
success.
    Senator Young. Thank you.
    The Chair. Thank you. Well, I should say, thank you Senator 
Young, to thank you and Senator Schumer for the two of your 
leadership on the underlying U.S. Innovation and Competition 
Act, and appreciate all your hard work in shepherding this 
through the process, and your attention to coming back here 
today and adding that issue. Senator Young has been very 
concerned all along about the China impact on this. So 
appreciate his comments. Senator Hickenlooper.

             STATEMENT OF HON. JOHN HICKENLOOPER, 
                   U.S. SENATOR FROM COLORADO

    Senator Hickenlooper. Thank you, Madam Chair.
    First, I want to thank each of you for your time today and 
for your careers. You know, most Americans look at these chips 
as some combination of machines and magic. And I think that is 
the consequence of, you know, whole careers dedicated to 
innovation, and constantly trying to find a better way to do 
it.
    Let me start with Mr. Gelsinger. I appreciate the recent 
announcement about the plant in Ohio. I think the CHIPS Act is 
going to create a number of construction, research, and 
manufacturing jobs all across the United States. I serve as 
Chairman of the Space and Science Subcommittee of this 
committee. And I also chair the Employment Workplace Safety 
Subcommittee of the HELP Committee, Health, Education, Labor 
and Pensions. And that subcommittee has jurisdiction over 
workplace education and training.
    And I guess I have spent a lot of time looking, as we go 
into this great transition, into clean energy. We are also 
going into a great transition of what a job it means, and how 
people are going to be trained. I think that the workforce 
development that is required to navigate this great transition 
is going to be prodigious. Some estimates for skilled STEM 
workforce needed to manufacture chips ranges from anywhere from 
100,000 to 300,000 workers by 2025.
    So in your view, how do you--how do we help workers from 
relevant manufacturing fields upskill, and reskill to satisfy 
those needs?
    Mr. Gelsinger. Yes, and we, we believe that this is a 
critical topic. One, that there are aspects of the CHIPS Act 
that are specifically designed to address. But clearly this is 
an area for public-private partnerships at scale. Just last 
week we announced $100-million initiative, right, around our 
Ohio plants, specifically in this area across the skills. You 
know, from community colleges and, you know, the most basic 
entry level manufacturing from focus on K through 12, you know, 
STEAM and STEM educational programs.
    Reaching into, you know, communities that haven't 
necessarily been affected, such as underrepresented minorities. 
You know, the position of females in the workplace, 
particularly in tech fields, you know, has been unacceptable. 
So these would be some of the examples of what those programs 
need to address.
    You know, we also believe strongly that we need the best 
and the brightest, right. And with that our higher education 
workforce, over 50 percent of U.S. STEM, you know, universities 
are foreign nationals, right. And I believe that every one of 
those should get a Green Card stapled to their diplomas when 
they graduate from a higher-level institution in America. We 
want the best and brightest, right, in the U.S.
    Taken together, this will be a challenging endeavor, right, 
and I look forward to digging into this more thoroughly with 
you, as well as the efforts that are part of the CHIPS Act more 
broadly, work across the spectrum, and we are pretty proud of 
our reputation in this area, but we know it is not nearly 
enough.
    Senator Hickenlooper. Well, as you are describing it, even 
if everything goes right, and we get immigration right. I mean, 
we begin to do a better job of apprenticeship to get the kids 
in, especially young women, people of color, if everything goes 
right, we are going to be--we are going to be pressed. So I 
appreciate your answer there.
    Mr. Mehrotra; and actually Mr. Gelsinger, you can answer 
this as well. The U.S. decline in global chip manufacturing has 
already been well documented. Obviously, foreign subsidies and 
incentives are what we have been hearing about. And they are 
taking chip manufacturing, and assembly, even many of the 
design activities, now we see more of that being done overseas. 
And I appreciate today's discussion on the importance of the 
CHIPS Act, and the FABS Act, both of which I support strongly.
    But Mr. Mehrotra, would you discuss the role of other 
factors? And you touched on this a few minutes ago. For 
instance, trade policies that play--will play in the domestic 
semiconductor industries' rebalancing.
    Mr. Mehrotra. So I think, again, it is important that we 
have a level playing field here in the U.S., with respect to 
our global competitors, and level playing field, certainly, is 
intended to be achieved with the start of chips funding, $52-
billion funding, as well as with the support of investment tax 
credits. Those are important initiatives to play catch up.
    Of course, policies related to our workforce development. 
What you just discussed, are going to be extremely important in 
terms of driving public and private sector partnerships. And 
then I think it is definitely important that we have policies 
that drive greater free trade, open markets, and absolutely a 
level playing field in terms of IP protection, and partnership 
with those around the world who do share those same values with 
us.
    Senator Hickenlooper. Perfect. Anything you want to add Mr. 
Archer, or Mr. Gelsinger, or either one?
    Mr. Archer. No. I think many of the things that you talked 
about are very important. Just last year--I am sorry--in the 
last 2 years, Lam Research, we have added more than 3,500 jobs 
in the U.S. We and our American suppliers are really feeling 
the pains of this tight labor market. And so, again, anything 
that can be done to help expand the skilled workforce, 
everything from manufacturing workers, all the way to the most 
advanced researchers is very welcome. And some elements of this 
legislation certainly are very supportive of that.
    Senator Hickenlooper. Great. And to which, I yield back.
    The Chair. Thank you Senator Hickenlooper. I will go to 
Senator Sinema. Thank you.

               STATEMENT OF HON. KYRSTEN SINEMA, 
                   U.S. SENATOR FROM ARIZONA

    Senator Sinema. Well, thank you, Chair Cantwell. And thank 
you to all our witnesses for joining us today to discuss this 
important topic. Semiconductors are essential for both the 
economic and national security of the United States. They are 
necessary technologies that Americans rely on every day, such 
as our phones, our cars, and our computers. And they are a key 
resource for our military.
    During the pandemic we have seen the chip shortage directly 
impact everyday families across the country. Arizona is a 
national leader in semiconductor manufacturing and research and 
development. The semiconductor industry employees over 20,000 
Arizonans, but over the past decades America's domestic 
semiconductor manufacturing has fallen dramatically compared to 
the rest of the world, leaving us vulnerable and forced to rely 
on other countries.
    I was proud to be original co-sponsor of the CHIPS for 
America Act, to help restore America's leadership in 
semiconductor manufacturing. And in response to the CHIPS Act, 
we have seen both Intel and TSMC announce significant 
investments in Arizona manufacturing, but Congress needs to 
finish our work and fund these chips grants. Our bipartisan 
bill passed the Senate nearly a year ago, and we need to get 
this bill to the President's desk.
    So my first question is for Mr. Gelsinger. You know, 
Arizonans are proud of Intel's long history in our state, 
following passage of our CHIPS for America provisions, I was 
thrilled at Intel's announcement of a $20-billion expansion in 
Arizona, which will translate to thousands of new Arizona jobs.
    Could you provide an update on Intel's expansion plans in 
Arizona, the new jobs that will be created and its impact on 
domestic chip manufacturing?
    Mr. Gelsinger. Yes. Thank you very much. And I am very 
happy and proud to support that our Arizona project is ahead of 
schedule and, you know, we have even been able to accelerate 
that by about a quarter. We expect that those facilities will 
begin coming online in late 2024, we will employ 3,000 new 
Intel employees, we will support on the order of 5,000 to 6,000 
construction jobs for the next couple of years.
    And we have been thrilled by the support, you know, in 
fact, we just had the First Lady join us for our Maricopa 
County Education Initiative that we just described there, to 
start building the workforce that we need, and some of the AI 
for the future training programs.
    So overall the project is going well. And, like you, we are 
proud residents of Arizona, and growing there very rapidly, and 
finding just a very, very warm welcome from the community as we 
continue to build this next phase of our manufacturing in 
Arizona.
    Senator Sinema. Thank you. It is wonderful to hear you are 
ahead of schedule. As I mentioned previously, Congress has yet 
to pass the final bill to provide funding for the CHIPS for 
America grants that will support our critical domestic 
semiconductor industry.
    Mr. Gelsinger, what does it mean for Intel, and 
particularly for Arizona's expansion project, if Congress 
cannot pass a semiconductor funding in a timely manner?
    Mr. Gelsinger. You know, and as I have described it, you 
know, we will go slower and smaller without the funding. We 
will go bigger and faster with the funding. You know, I am 
putting as much pressure on our profitability and our balance 
sheet as I possibly can. And I am doing that at the great howls 
of Wall Street, seeing our stock lowered as a result of these 
substantial investments.
    But even though I am making such substantial investments, 
it is not enough to restore American leadership on this 
technology. It is about restoring our position in the world, 
about bringing this industry back from Asia. And we are proud 
of our investments in Ohio, in Oregon, and very prominently in 
Arizona.
    And we also have even broader plans and, you know, visions 
for the next phases of that, that could be enabled by the CHIPS 
Act beyond what we have already announced, senator, and we 
would be thrilled to discuss those further with you.
    Senator Sinema. Thank you. You know, I have long supported 
efforts to advance STEM education, and ensure that Arizona has 
a highly skilled workforce that can help support technological 
advancements. So I was very pleased to hear about Intel's new 
Quick Start Workforce Development Program partnering with Mesa 
Community College. Can you describe that new program to train 
semiconductor technicians in Arizona? And thank you again, Mr. 
Gelsinger.
    Mr. Gelsinger. Yes. In summary, what it is, is a public-
private partnership, you know, in terms of them helping us to 
establish the training programs, we are helping with the 
curricula, and basically with very high probability, the 
graduates end up in a job as one of our facilities. So it 
reduces the risks that the students have. It increases the 
effectiveness of the educational program. And overall, it is 
building our workforce for the future.
    Overall, these types of programs have been seen extremely 
effectively. And we are thrilled to be able to participate 
there with Mesa Community College, Maricopa, right, and our 
other sites. This is the kind of model that lowers the cost of 
education, increases its effectiveness and prepares the 
workforce of tomorrow.
    Senator Sinema. Thank you. Thank you, Chair Cantwell.
    The Chair. Thank you, Senator Sinema. That concludes the 
first round, as I know it, unless there is a member out there 
who is either quickly walking over here, or is going to jump 
online. I see that Senator Scott wanted to ask a second round 
question. My intention is to allow you to do that. And then we 
would close out the hearing.
    So again, and thank you--that is kind of the schedule, 
unless somebody is out there who wants to quickly jump in here. 
So with that, Senator Scott.
    Senator Scott. Again, Chair Cantwell, I want to thank you 
for hosting this hearing, this is an important issue. It is a 
lot of money. I think all of you, all four of you have run 
successful businesses. And when you go to your Boards and you 
say ``I want to make an investment,'' what they say to you is: 
``What are you going to get back? How much cash you get back?''
    You don't, go then and say: ``Hey, I am going to get a 
bunch of revenues.'' That doesn't help you. You don't say: 
``Hey, it is going to have a great economic impact.'' Or, 
``gosh, I am going to add a thousand jobs.'' They say: ``If you 
are going to invest certain dollars, you are going to get 
something back.'' And so I was disappointed that nobody has 
come back and said, you know, if you guys want us to spend $52 
billion. But nobody comes back and says: ``OK, for $52 billion, 
the taxpayers of this country will get a certain dollar back.''
    None of you, I think would--you know, if you were the 
fiduciary, you would say: ``I am going to do it without getting 
a return.'' So if you have something like that, I would love to 
see it, because I have not seen it.
    But Mr. Gelsinger, Intel apologized to Chinese companies 
about American sanctions. Can you explain why that is 
appropriate?
    Mr. Gelsinger. Yes. Let me just add to the earlier comments 
on the ROI. You know, obviously, as we have already read in our 
written testimony we provided economic impact across our 
states. And we can, you know, certainly dig into that more with 
you for the future. These are good ROI investments, but also--
--
    Senator Scott. Can I just explain that for a second though?
    Mr. Gelsinger. But it is also, if I might?
    Senator Scott. Revenues is not return.
    Mr. Gelsinger. All right. These are state economic impact 
returns.
    Senator Scott. Revenues are not returns. I mean it is not 
like you have these revenues for the state.
    Mr. Gelsinger. Again we are happy to have that 
conversation.
    Senator Scott. I mean, I probably did a thousand economic 
deals when I was Governor of Florida. I didn't say, or somebody 
say: Hey, I will bring you revenues.
    Mr. Gelsinger. From a state perspective, revenues produce 
tax benefits. So we are happy to dig into that more with you. 
But it is also about returning this industry from Asia to 
American soil, right. It is also about national defense. These 
are policy issues for the Nation that stretch well beyond just 
the economic direct benefits associated with it.
    Now, with respect to the China comments as well, you know, 
the situation was in response to our supplier letter. This is a 
global supplier letter that we put in place to minimize risk, 
to manage our supply chain globally, no forced labor, no 
slavery, no other inappropriate actions. That global supplier 
letter inappropriately included a specific reference to one 
region in the world. It was a global letter covering many parts 
of our global supply chain that touches almost every country in 
the world. That was inappropriate. We have revised the letter 
appropriate----
    Senator Scott. So you think it is inappropriate to say you 
shouldn't buy products that are created with slave labor?
    Mr. Gelsinger. Our letter makes it very clear that we do 
not support slave labor anywhere in the world. However, as a 
global letter, we shouldn't have been calling out any 
particular regions since there are many regions in the world--
--
    Senator Scott. I would call out anybody for slave labor, 
and I would call it out by regions. I think that is 
inappropriate.
    Mr. Gelsinger. We could enumerate those across the world, 
and we didn't see that as appropriate. The policies are clear.
    Senator Scott. Slave labor?
    Mr. Gelsinger. We have reinforced this very, very 
aggressively that our policies in such matters are clear, 
consistent across the world. And that is how we are going to 
continue to operate, and we have been proud to operate for 
decades in the past. And for that, you can be confident that we 
will be enforcing, not just the U.S. policies, obeying the laws 
of the U.S., but continue to be a great global employer, and 
managing our supply chain with that in mind.
    Senator Scott. Buying products created with slave labor is 
wrong. Let us go to the next question.
    Mr. Gelsinger. We agree.
    Senator Scott. As a company, it seems to me your biggest 
risk is going to be exactly what has happened to Russia, 
companies doing business in Russia right now. You can look 
right now, people are mad that companies are doing business in 
China because of the human rights issues: putting in a million 
people in prison for their religion, taking away the organs, 
involuntarily, of prisoners, taking away the basic rights of 
Hong Kong citizens, threatening Taiwan.
    So already your company, anybody who does business in China 
has a risk. So aren't you, as the CEO of a company, shouldn't 
you be going to your Board and saying: ``Hey, look, we have got 
a big problem here, because the American public, the people who 
live in Europe are going to say: ``Hey, you have got to get out 
of China, because they are about to invade Taiwan.''
    And when they do, what are you going to do when you have 
all these operations in China, and the expectation is, you shut 
down? Why wouldn't you, on your own, without getting the 
subsidy from the American Government, and the American 
taxpayers, say: ``I have got to get out of there right now?''
    Mr. Gelsinger. The Chinese market is almost half of the 
semiconductor market in the world. Approximately half of that 
is manufacturing and supply. Approximately half of that is 
consumption. It is the fastest-growing semiconductor market in 
the world. So if we are here to be the largest provider of 
semiconductors in the world, we must be participating in the 
largest market for semiconductors in the world.
    Senator Scott. I ran companies. I don't care about it being 
the largest. I care about: What do I have to do to make sure my 
company remains viable? What are you going to do when China 
invades Taiwan, and you are expected to stop doing business in 
China? You are just going to say: ``Nope, I am just going to 
keep doing business in China because I don't care?''
    Mr. Gelsinger. Our expectation is that, we will continue a 
long practice of deepening our investments in manufacturing, in 
R&D in the U.S., and supplying the global market for 
semiconductors, according to the laws, policies, and exports of 
the----
    Senator Scott. So it won't bother you when they invade 
Taiwan?
    Mr. Gelsinger. It will bother me enormously.
    Senator Scott. Your are just going to keep doing----
    Mr. Gelsinger. In fact, the----
    Senator Scott. But you won't do anything about it?
    Mr. Gelsinger [continuing]. Concerns that I have around the 
geopolitical situation, drive the passion and urgency to build 
this industry in the U.S. This is a core reason why we are 
here. We have allowed this industry to shift to Asia. It is 
time for us to get it back onto American soil.
    Senator Scott. You should do it.
    Mr. Gelsinger. And we are passionate about that.
    Senator Scott. But why, why does the taxpayer are 
wondering----
    Mr. Gelsinger. That is why the CHIPS Act is so critical to 
get it done now.
    Senator Scott. So let us get to the point. You can't tell 
me how a taxpayer in Florida gets a return.
    Mr. Gelsinger. I think we have addressed that.
    Senator Scott. There is no study, OK. You continue to 
apologize for American position that we shouldn't be doing 
business with a Communist country where they have human rights 
violation, and you won't even acknowledge that you would even 
stop doing business in Communist China if they invade Taiwan. I 
think that is wrong.
    The Chair. And that, Senator Scott, I don't think that that 
is what Mr. Gelsinger said. I do want to say for the record, 
there is an analysis that was done by a Boston Consulting Group 
on the impact. Over 6 years, they project that a $50-billion 
manufacturing incentive would generate $147 billion to GDP, and 
1.1 million jobs.
    So I do think that there are some analyses out there, every 
dollar from the Federal Government put toward the semiconductor 
research directs about--deliver 1650 to GDP as a dollar to 
investment ratio.
    So there are some analyses out there. I do think that they 
are important to take a look at this. I also think that these 
issues are very challenging to us in a global economy. I am a 
person who supports trade. I actually think trade changes 
culture, I think.
    That doesn't mean that we don't have bright lines. And I 
think we have a lot of bright lines in the United States. And 
one of them is about our national security, and basically 
saying that we don't want to have communication products that 
have government back doors to them. And we want, anybody can be 
in the global supply chain, but if your government doesn't 
honor this aspect of making sure our architectures are 
protected and secure, then we don't--we don't want to do 
business.
    But this bill is really going to be about us creating a 
framework in which the United States gets that next generation. 
Like my chart said, the next-generation supply chain here.
    I want to thank all our witnesses. Mr. Feight, thank you 
for hanging in there from Europe. You didn't get as many 
questions as the other people, but I want you to know every 
time you talked, Mr. Gelsinger wrote down what you said. And 
the reason I am pointing that out is because I think that is 
symbolic about the ecosystem that we are trying to create.
    If this all exists here in the United States and you have 
those closer relationships, and the whole supply chain is 
talking to each other, and they are talking about what their 
needs are. And they are talking about the next generation, I 
guarantee you, the United States will do the right things to 
help catch up on this shortage, and lead the way in next-
generation technology.
    You heard from many of my colleagues who had various takes 
on this issue. You heard from Senator Rosen about her interest 
in the broadband system. I, too, have a very keen interest in 
our grid, in electrification, and what we are going to do to--
you know, we are not going to make any of the transformation 
without our grid providing more of the communication system.
    And so there are just so many opportunities before us. So I 
also want to thank you, particularly you, Mr. Gelsinger, but 
obviously our other witnesses. Look, this is--we want to see 
these companies driven by good engineering. It is called the 
Information Age for a reason. That means that the opportunities 
are there, but we need the engineers.
    So I actually applaud some of the financial decisions you 
have been making, because it is being based on good 
engineering. And I guarantee you in the end that is what is 
going to be rewarded by American investments is solid, good 
engineering.
    We have led in this area in the past. We want to lead 
again. We appreciate what that will do for us for innovation, 
and for jobs in the United States of America.
    So thank you all very much for being here. The hearing will 
be open in the record for two more weeks. Senators will have 
until Wednesday, April 6, at noon, to submit questions for the 
record. Witnesses will have two weeks to respond to those 
questions, and we appreciate your diligence on that.
    That concludes today's hearing. We are adjourned.
    [Whereupon, at 12:31 p.m., the hearing was adjourned.]

                            A P P E N D I X

   Response to Written Questions Submitted by Hon. Ray Ben Lujan to 
                             Pat Gelsinger
    Mr. Gelsinger, as you noted in your testimony, Federal investment 
in semiconductor research and development (R&D) used to be more than 
double that of private investment. Unfortunately, public funding has 
been lacking in this area recently, despite the increasing importance 
of semiconductor technology to the economy and in our lives.

    Question 1. Do you think the Federal Government currently invests 
enough in advanced semiconductor R&D, relative to private industry?
    Answer. The Federal government does not currently invest in 
semiconductor R&D at the levels necessary to maximize and complement 
private U.S. semiconductor industry investment. A 2020 report from the 
Semiconductor Industry Association (SIA) determined that Federal 
funding for semiconductor R&D has historically lagged behind private 
sector investments.\1\ Forty years ago, Federal funding was more than 
double the private sector, but today the private sector invests 23 
times more in direct semiconductor research than the Federal 
government. In 2019, private sector investment in semiconductor R&D 
totaled nearly $40 billion, while the Federal government spent only 
$1.7 billion on core, semiconductor-specific R&D. This Federal spending 
equaled only 13 percent of the total U.S. semiconductor R&D, which is 
significantly below the 22 percent share of Federal government funding 
across all sectors. While private investment in semiconductor R&D as a 
percentage of GDP has increased nearly 10-fold over the last 40 years, 
Federal investment has remained flat (see SIA report figure below).
---------------------------------------------------------------------------
    \1\ Sparking Innovation: How Federal Investment in Semiconductor 
R&D Spurs U.S. Economic Growth and Job Creation, SIA, (June 2020); 
available at https://www.semiconductors.org/wp-content/uploads/2020/06/
SIA_Sparking-Innovation2020.pdf.
---------------------------------------------------------------------------
    SIA also found that additional Federal funding for semiconductor 
R&D would increase private sector R&D investment and overall economic 
growth, create new jobs, and help the U.S. lead in the technologies of 
the future. Because semiconductor innovation is becoming increasingly 
complex and expensive due to the continuous pursuit of Moore's Law, the 
report concluded that increased Federal funding would help the U.S. 
sustain its leadership in the industry. In fact, the report noted that 
the impact of the present funding gap may create a risk for the overall 
semiconductor industry to maintain its historical pace of innovation.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Another recent SIA report, Strengthening the Global Semiconductor 
Supply Chain in an Uncertain Era, found that this history of U.S. 
investment has differed significantly from that of China:

        In contrast, China is committing large sums to pre-competitive 
        research as part of its effort to build a strong domestic 
        semiconductor industry. In the last 20 years China has been 
        closing the gap with the U.S. on overall R&D spending. 
        According to data from the Organization for Economic 
        Cooperation and Development (OECD), in 2018 China was the 
        world's second biggest spender on R&D in absolute terms: its 
        total R&D investment was just 5 percent below the U.S. in 
        Purchasing Power Parity terms. However, just about 5-6 percent 
        of Chinese R&D spend currently goes to basic research, 
        significantly below all other countries with high investment 
        levels in R&D.

        China's new five-year plan for 2021-25 announced in March 
        clearly establishes boosting basic research as a critical 
        priority. Central government spending on basic research will 
        increase 11 percent in 2021, well above the 7 percent planned 
        for the overall R&D investment and the 6 percent target for GDP 
        growth. Semiconductors has been designated as one of the seven 
        areas that will be given priority in terms of funding and 
        resources.\2\
---------------------------------------------------------------------------
    \2\ Strengthening the Global Semiconductor Supply Chain in an 
Uncertain Era, SIA (Apr. 2021) at 15; available at https://
www.semiconductors.org/wp-content/uploads/2021/05/BCG-x-SIA-
Strengthening-the-Global-Semiconductor-Value-Chain-April-2021_1.pdf.

    Question 2. How would further Federal investments in nano- and 
microelectronics R&D programs, such as at the Department of Energy, 
support innovation in semiconductor development and advanced 
manufacturing?
    Answer. Drawing again from the April 2021 report by the 
Semiconductor Industry Association, there are many excellent 
illustrations of generations of technology breakthroughs that came as a 
results of global research collaboration, including R&D funded by 
government support:

        [S]ome of the most critical recent advancements in 
        semiconductor technology were the result of several decades of 
        global R&D collaboration. Fin field-effect transistor (FinFET) 
        technology enabled manufacturing at 22 nanometers and is the 
        dominant transistor design for today's leading-edge chips at 5 
        nanometers. While the U.S. pioneered the development of the 
        FinFET technology and is the source of 48 percent of the 
        related patents, the rest of the world also contributed heavily 
        to applied R&D leading to commercialization. Specifically, 
        Taiwan, which hosts several of the world's leading foundries, 
        has contributed 20 percent of the FinFET patents.

        In the case of EUV, the technology that underpins the equipment 
        utilized to manufacture semiconductors on the 7-and 5-nanometer 
        nodes and below, its development started in the 1980s with 
        fundamental research done in the U.S. and Japan on the use of 
        soft X-rays, leading to the first demonstration of the 
        technology in 1986. In the 1990s and early 2000s, NTT in Japan, 
        Bell Labs and Lawrence Livermore National Laboratory in the 
        U.S. and the University of Twente in the Netherlands further 
        pushed the research in this technology. ASML, a company based 
        in the Netherlands, then sought to further develop and 
        commercialize EUV in partnership with institutions like IMEC 
        and corporations including Intel (headquartered in the US), 
        Samsung (South Korea), and TSMC (Taiwan). Together, ASML and 
        its global partners funded R&D during the pre-commercial stage 
        of the technology, and subsequently ASML invested $8 billion to 
        put the technology in production in modern fabs beginning in 
        2018.

        In addition to the global collaboration in the development of 
        the underlying technology, EUV also relies on a global supply 
        chain: as Exhibit 13 shows, today the EUV lithography equipment 
        developed by ASML contains about 100,000 parts provided by over 
        5,000 suppliers spread across the globe.\3\
---------------------------------------------------------------------------
    \3\ Strengthening the Global Semiconductor Supply Chain in an 
Uncertain Era, SIA (Apr. 2021) at 29; available at https://
www.semiconductors.org/wp-content/uploads/2021/05/BCG-x-SIA-
Strengthening-the-Global-Semiconductor-Value-Chain-April-2021_1.pdf.

    SIA' s 2020 report highlighted that additional Federal investment 
in semiconductor research is needed to help discover the next 
breakthrough technologies that will allow the U.S. to compete globally 
and lead in the critical technologies of the future, including 
artificial intelligence, quantum computing, and 5G. These core 
technologies will fuel future innovations in other fields essential to 
future economic growth such as robotics and intelligent products.\4\
---------------------------------------------------------------------------
    \4\ Sparking Innovation: How Federal Investment in Semiconductor 
R&D Spurs U.S. Economic Growth and Job Creation, SIA, (June 2020) at 9; 
available at https://www.semiconductors.org/wp-content/uploads/2020/06/
SIA_Sparking-Innovation2020.pdf.
---------------------------------------------------------------------------
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                             Pat Gelsinger
    The Government has helped to keep the United States at the leading 
edge of semiconductor manufacturing, with benefits both to national 
security and additional positive impacts on the economy. For instance, 
Department of Defense (DoD) investments helped to advance lithography 
and chip design.

    Question 1. USICA and COMPETES each contain a $2 billion investment 
specifically for the DoD to secure the microelectronics supply chain 
required for our national security missions. Considering that Intel has 
already started partnering with the DoD on efforts like the State-of-
the-art Heterogeneous Integrated Packaging (SHIP) Prototype Project and 
the Rapid Assured Microelectronics Prototypes--Commercial (RAMP-C) 
Program, how will Intel help ensure that DoD has access to leading-edge 
chips?
    Answer. Intel has a long history of working with the U.S. 
Government, including DoD, to provide leading-edge chips. DoD must 
benefit from the rapid pace of innovation offered by Moore's Law when 
creating new microelectronics private sector partnerships that ensure 
the design, manufacture, distribution, and integration of ``measurably 
secure microelectronics'' per Section 9903(a) of the CHIPS for America 
Act. In other words, DoD must compete to secure both state-of-the-art 
innovation and capacity. In the global technology innovation race 
related to artificial intelligence/machine learning, quantum computing, 
high performance computing, and advanced communications infrastructure, 
DoD cannot afford to fall behind. This means DoD must support and gain 
access to domestic development of leading-edge chip technology.
    Intel commends the DoD for Trusted and Assured Microelectronics 
programs and projects that allow it to source high assurance 
microelectronics from multiple commercial semiconductor suppliers. 
Specifically, the State-of-the-art Heterogenous Integrated Packaging 
Prototype Program (SHIP), Rapid Assured Microelectronics Prototype 
(RAMP), and RAMP-C programs lay the groundwork for ensuring DoD has 
access to such microelectronics through leveraging U.S. origin and 
commercially developed technology. The DoD should scale and enable the 
more complex and resource intensive next phases of these programs 
through the new partnerships authorized under Section 9903(a) of the 
CHIPS for America Act, which Intel stands ready to execute.
    More specifically, RAMP-C is targeted to enable a U.S.-based, 
commercially viable, economically responsible, leading-edge logic 
foundry to make product for both commercial and DoD customers. SHIP, a 
complementary program focused on packaging, shares the same goal to 
enable leading edge, commercial foundries to execute package design and 
manufacturing projects for defense-specific products. Both programs are 
essential to accelerate innovation in developing ``measurably secure 
microelectronics'' for DoD by leveraging commercial capability.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    These novel programs, when combined with assurance efforts and 
measurement initiatives like Microelectronics Quantitative Assurance 
and any additional layers of security that may be required, offer DoD 
the opportunity to both rely on and drive progress in state-of-the-art 
technology developed by the private sector. It is important to note, 
however, that DoD will require significantly more funding to drive the 
output of these developmental programs into products for high volume 
manufacturing. It is unclear whether the DoD has access to the 
necessary funding, and Intel encourages Congress to consider 
opportunities to prove DoD a dedicated funding stream for Section 
9903(a) to scale projects like these.

    Question 2. Mature semiconductors are critical to various sectors 
of the United States economy, including aerospace and defense, 
telecommunications, transportation, and healthcare. How might Intel and 
the broader CHIPS investment support fabrication of mature 
technologies, so critical to the above sectors?
    Answer. Semiconductors play an increasingly large part in every 
sector of the economy as our lives become further digitized. In early 
2020, some sectors reduced forecasts for semiconductors and other 
materials just as demand was about to spike, and order lead times for 
mature chips have risen steadily throughout the pandemic. Although 
Intel had predicted that the chip shortage would plateau in 2022 and 
subside in 2023, we now expect the chip shortage to persist into 2024.
    Unfortunately, the 16-months it has taken thus far since enactment 
of the CHIPS for America Act to pass funding has cost the United States 
precious time. U.S. national security and the U.S. economy are more 
vulnerable to these shortages today. The only solution to the ongoing 
shortage is to increase manufacturing capacity, but it takes 2-4 years 
to construct a new fab.
    We are doing our part--completing a $3 billion expansion project in 
Oregon, starting work on new or expanded capacity in Arizona and New 
Mexico, and announcing two new leading edge fabs in Ohio, which--if 
CHIPS Act funding moves forward--will exceed $20 billion in Intel 
investment in Ohio.
    Intel also announced efforts to diversify its product offerings 
with a pending acquisition of one of the world's leading providers of 
foundry services for mature and analog chips for use in markets such as 
high-end mobile, automotive, medical, industrial, and aerospace and 
defense. If Intel secures funding under the CHIPS Act, it will support 
our ability to accelerate our investments and help address unmet chip 
demand in these sectors.
    But it will take more than the four new fabs and foundry 
acquisition Intel has announced in the last year to secure U.S. 
economic and national security. The United States needs significant 
additional U.S. capacity, which will be spurred by the CHIPS for 
America Act, and it is critical for Congress to provide funding as soon 
as possible.
    Make no mistake: America's future competitiveness in technology 
from AI to quantum computing to high performance computing requires 
that the U.S. have a chipmaker building leading-edge chips in the U.S., 
but the chip shortage will not end until mature chips are also 
available to meet demand. CHIPS Act funding will encourage more 
investment in new facilities that will make both leading edge and 
mature chips that are in the interest of the United States.

    Question 3. The Congress recognizes the urgent need to invest in 
domestic semiconductor manufacturing. The Congress is also accountable 
to American taxpayers and needs to ensure adequate oversight of those 
investments. Given the importance of protecting taxpayer investments, 
what steps will Intel take to ensure that taxpayer funds maximize 
benefits to the United States taxpayer, to national security, and to 
the continued innovation required for U.S. technological leadership?
    Answer. The CHIPS for America Act will unleash significant private 
sector investment that will broadly benefit the U.S. economy. The law 
includes important safeguards to ensure government funds are used to 
advance the public interest and protect the taxpayer, and we look 
forward to working with the Department of Commerce on the effective 
implementation of these important programs. Moreover, Intel is the lead 
U.S. manufacturer of advanced logic chips, with the majority of our 
manufacturing, R&D, and intellectual property conducted or held in the 
United States. Intel is working to accelerate that leadership. We 
recently announced plans to build two new fabs in Ohio, in addition to 
the two new fabs already under construction in Arizona. These fabs will 
feature state of the art technology capable of producing chips at the 
leading edge. Upon completion, I expect each of these fabs to operate 
at about 20,000 wafer starts per month.
    Construction of these four facilities alone will create over 12,000 
construction jobs in the near term, and upon completion will create and 
support tens of thousands of long term, full-time jobs at Intel, in the 
semiconductor supply chain, and in various service sectors supporting 
these facilities. Specifically, each of the four new fabs in Arizona 
and Ohio will provide direct employment for about 1,500 Intel 
employees, for a total of approximately 6,000 new Intel employees. The 
facilities will also provide employment for thousands of additional 
trade workers and other personnel who are needed on-site to directly 
support facility operations. Tens of thousands of additional jobs will 
also be created among the suppliers, partners, and other businesses 
that support the semiconductor ecosystem. A recent economic study 
indicates that for every Intel full time employee position we create, 
our operations support an additional 13 jobs.\5\ In total, we estimate 
that these four new fabs alone will create and sustain up to 78,000 
total direct and indirect U.S. jobs.
---------------------------------------------------------------------------
    \5\ Intel Corporation, Intel's Impacts on the U.S. Economy, 
available at https://download.intel
.com/newsroom/2021/corporate/intel-impact-us-economy.pdf.
---------------------------------------------------------------------------
    We have a long history of working with government partners, 
educational institutions, vocational institutions, and other 
stakeholders to expand talent pipelines for the semiconductor industry 
that then benefit the economy at large. In Arizona, for example, Intel 
has funded and partnered closely with two-and four-year institutions to 
create and scale the research, education, and workforce development 
programs needed to train individuals for rewarding careers in the 
semiconductor industry. We are now working to further expand those and 
other programs to support our growing operations there, and we are 
doing the same in Ohio. Even before breaking ground in that state, 
Intel announced that it will invest $50 million directly in Ohio 
educational and vocational institutions to train the workers of 
tomorrow. In fact, we have already issued a call for proposals, which 
are due at the end of May. In addition, Intel announced a $100 million 
partnership with the National Science Foundation (NSF) to expand 
semiconductor-related research, education, and workforce development 
across the country. Intel will directly invest $50 million in this 
effort, with $50 million in matching funds from NSF.
    While these actions demonstrate our ongoing commitment to both 
manufacturing and workforce development in the United States, Intel can 
do more and move faster with partnership from the U.S. government. With 
CHIPS funding, Intel's Ohio investment could grow to over $100 billion 
to build and equip eight total new fabs over the next decade, creating 
tens of thousands of additional jobs--above and beyond those outlined 
above--at Intel and among our partners, suppliers and in various 
supporting service sectors.
    Lastly, your question also asked about Intel's contribution to 
continued innovation to ensure U.S. technology leadership. Intel is one 
of the largest R&D spenders in the world, and the majority of our R&D 
spend occur in the U.S. We made specific recommendations to the 
Department of Commerce on how Intel could contribute to the National 
Semiconductor Technology Center (NSTC), the major R&D program set up 
under Section 9903(c) of the CHIPS for America Act. The NSTC, to be 
operated by a public/private consortium, is designed to ``conduct 
research and prototyping of advanced semiconductor technology to 
strengthen the economic competitiveness and security of the domestic 
supply chain.''
    Specifically, we suggested to the Department of Commerce that Intel 
could set up and operate an Advanced Lithography Center (ALC), funded 
by the NSTC and private sector, which would provide access to advanced 
lithography tools and photoresist characterization equipment to enable 
novel process technology pre-competitive research. Any researchers from 
qualified NSTC member companies and research groups could have access 
to the ALC.
    Intel also has proposed to the Department of Commerce that, as part 
of the National Advanced Packaging Manufacturing Program (NAPMP) in 
CHIPS Act section 9906(d), an Advanced Packaging Manufacturing Center 
(APMC) be set up and funded by the NAPMP, as a center to research new 
integrated package and assembly/test technologies and manufacturing 
methods. Researchers from qualified NSTC member companies and research 
groups should have access to the APMC. With our leading advanced 
assembly, test and substrate technologies, Intel is interested in 
helping to establish such a center as some of the base technologies are 
in place and are available through Intel's foundry services. Like the 
ALC, the APMC is necessary to bridge the gaps that exist between lab to 
fab, or innovation to commercialization in the United States.\6\
---------------------------------------------------------------------------
    \6\ For more detail on the ALC and APMC recommendations, see Intel 
Corporation Comments on ``Incentives, Infrastructure, And Research and 
Development Needs to Support a Strong Domestic Semiconductor 
Industry,'' Department of Commerce, Parts 2 and 3, at pp. 17-34 
(Federal Register Notice of January 24, 2022, DOC-2021-0010), available 
at https://www.regu
lations.gov/comment/DOC-2021-0010-0196.

    Question 4. What requirements does Intel recommend that Congress 
and the Department of Commerce impose on funding recipients?
    Answer. Intel commends the authors of the CHIPS for America Act for 
including robust transparency and claw back mechanisms in the 
authorizing law, including provisions requiring grant recipients to 
meet committed timelines and avoid specified research and technology 
licensing with a foreign entity of concern. The grant eligibility 
requirements in Section 9902(a)(2)(B) of the CHIPS for America Act also 
define strong protections for taxpayers and represent assurance for 
Congress that the Department of Commerce will create a virtuous cycle 
of semiconductor innovation. Intel recommends caution when considering 
imposing unilateral restrictions on grant fund recipients, which could 
undermine the legislative intent and discourage potential applicants 
from investing in the United States. However, as the Department of 
Commerce begins implementation of the program, we would encourage the 
development of requirements beyond the legislative grant eligibility 
criteria that focus on how proposed projects would most effectively:

  1.  Build up American-controlled semiconductor manufacturing capacity 
        and U.S. technology leadership by developing advanced or 
        leading-edge semiconductors;

  2.  Create a more secure, stable domestic supply chain for essential 
        semiconductors to meet U.S. economic and national security 
        needs;

  3.  Help ensure technological innovation and IP funded under the 
        CHIPS Act remain and grow in the U.S.; and/or

  4.  Ensure a level playing field for American companies trying to 
        compete in the global semiconductor market.

    In addition, the CHIPS for America Act contains important 
requirements to ensure that incentive recipients have educational and 
workforce development plans and secure local community commitments to 
support expanded semiconductor operations. For instance, applicants 
must provide evidence that they (1) will financially support training 
and education initiatives in regional communities, including programs 
to expand opportunities for economically disadvantaged individuals; and 
(2) have secured commitments from regional educational and training 
entities to provide workforce training, including programming designed 
for economically disadvantaged individuals. Robust and pragmatic 
administration of these provisions will help ensure the availability of 
educated and skilled workers capable of maintaining and improving new 
design, manufacturing, and packaging operations.
    Congress and the Department of Commerce should strongly emphasize 
the education and workforce development requirements codified in the 
CHIPS for America Act to maximize the taxpayer value. At a minimum, to 
sustainably address talent pipeline issues, applicants should be 
required to demonstrate: (1) extensive collaborations with community 
colleges and other educational institutions to develop sufficient 
pipelines of technicians and technologists to support facility 
operations; (2) extensive collaborations with regional colleges and 
universities to support scholarships, joint research, and internship/
mentoring programs dedicated to semiconductor design, manufacturing, 
and packaging; and (3) specific initiatives to attract and retain 
individuals from traditionally underrepresented demographic and 
economic groups.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Tammy Duckworth to 
                             Pat Gelsinger
Topic: Semi-conductor Manufacturing Capabilities in the Midwest
    Question 1. Intel is one of only three semiconductor manufacturers 
in the world that makes advanced logic chips. Your recent $20 billion 
investment in a new greenfield manufacturing site in Licking County, 
Ohio is a great opportunity to produce chips with advanced transistor 
technologies. My home State of Illinois in the Midwest is home to 
several advanced and semiconductor manufacturing sites. In fact, State 
Senator Suzy Glowiak Hilton of Oakbrook Terrace introduced legislation 
to offer potentially huge tax credits to manufacturers who establish 
facilities in the State of Illinois. This bill cleared the State Senate 
Revenue Committee and has rapidly gained support over the past few 
months. Not only does such legislation attract companies, but it also 
has the potential to create thousands of jobs and stimulate the 
American economy.
    At the Federal level, how can Congress continue to help accelerate 
the provision of benefits and leverage public-private partnerships to 
help us manufacture these advanced logic chips in the United States?
    Answer. It is difficult to overstate the urgency for Congress to 
fully fund the CHIPS for America Act. The 16-month wait for 
Congressional since the passage of the CHIPS for America Act to fund 
the Act has cost the United States precious time. U.S. national 
security and the U.S. economy are more vulnerable to interruptions of 
semiconductor supply today. Congress must move expeditiously to reach a 
compromise on the pending competition package to accelerate investment 
in U.S. chip manufacturing.
    The CHIPS for America Act is, in itself, one of the most important 
public-private partnerships designed in decades. That said, three 
important aspects of the CHIPS for America Act will help accelerate 
beneficial public-private partnerships that will improve U.S. access to 
leading-edge semiconductors today and for the long run:

  1.  Chipmaking: Once funded, the CHIPS for America Act will help 
        chipmakers immediately take steps to address shortages of logic 
        chips that have persisted for too long. Intel expects public 
        sector investment in U.S. chipmaking, which will stimulate and 
        supplement private sector funding, to help level the playing 
        field with foreign investment programs. This is especially true 
        in East Asia where governments provide strong public sector 
        support for national champions that contributes significantly 
        to the creation of a 30 to 50 percent cost differential 
        compared to the U.S. that persists today. Over time, this 
        imbalance created a vulnerability for the U.S., leaving the 
        U.S. without adequate domestic chipmaking.

  2.  Advancing R&D: Investments funded in part by CHIPS for America 
        Act grants will create new research opportunities that will 
        advance U.S. capability and manufacturing know-how. In 
        particular, Section 9906(c) and (d) of the CHIPS for America 
        Act, authorizing the National Semiconductor Technology Center 
        (NSTC) and National Advanced Packaging Manufacturing Program 
        (NAPMP), will create renewed leadership opportunities for U.S. 
        companies and organizations. In January, Intel submitted 
        recommendations to the Department of Commerce on our views for 
        the NSTC's and NAPMP priorities, and how to structure the NSTC 
        and NAPMP to combine private and public funding in effective 
        management structures to help bridge the gaps between lab to 
        fab, or innovation to commercialization, and thus advance U.S. 
        technology leadership.\7\
---------------------------------------------------------------------------
    \7\ Intel Corporation Comments on ``Incentives, Infrastructure, And 
Research and Development Needs to Support a Strong Domestic 
Semiconductor Industry,'' Department of Commerce, Parts 2 and 3, at pp. 
17-34 (Federal Register Notice of January 24, 2022, DOC-2021-0010), 
available at https://www.regulations.gov/comment/DOC-2021-0010-0196.

  3.  Jobs and workforce development: During Intel's January 2022 
        announcement creating the Silicon Heartland, we highlighted the 
        significant demand we would create for highly skilled workers 
---------------------------------------------------------------------------
        in the region:

                As the largest single private-sector investment in Ohio 
                history, the initial phase of the project is expected 
                to create 3,000 Intel jobs and 7,000 construction jobs 
                over the course of the build, and to support tens of 
                thousands of additional local long-term jobs across a 
                broad ecosystem of suppliers and partners.\8\
---------------------------------------------------------------------------
    \8\ See Intel Press Release, available at https://www.intel.com/
content/www/us/en/newsroom/news/intel-announces-next-us-site-landmark-
investment-ohio.html.

      Intel is already working on creating the research, education, and 
        workforce development programs needed to meet these workforce 
        demands. We announced a $50 million direct investment in Ohio 
        educational and vocational institutions to train Ohioans for 
        the semiconductor industry. Additionally, Intel announced an 
        additional $50 million investment, with $50 million in matching 
        funds from the NSF, to scale similar efforts across the 
        country.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Amy Klobuchar to 
                             Pat Gelsinger
    Semiconductor Sourcing Challenges. The past two years have 
highlighted significant supply chain disruptions and vulnerabilities 
for U.S. shippers, who saw the price of shipping containers increase 
exponentially, especially on Asia-Pacific routes. American exports are 
sitting at ports while ocean carriers return to Asia with empty 
containers. My bill with Senator Thune, the Ocean Shipping Reform Act, 
will address these supply chain challenges by making it harder for 
ocean carriers to arbitrarily turn away goods at ports that are ready 
to be shipped abroad.

    Question 1. Semiconductors consist of several different components 
sourced from across the world. What challenges has your company had 
either exporting chips or importing components for production?
    Answer. First, I think it's imperative to thank and recognize the 
often forgotten heroes of the current supply chain crises--from the 
longshoremen, truckers, and ship crews, who are working long weeks away 
from family, to the supply chain risk managers at companies working to 
create new solutions to incredibly difficult problems. As MIT Professor 
Yossi Sheffi says, the COVID crisis was the supply chain manager's 
finest hour. It is inspiring to see so many throughout our economy 
working together to solve problems in ways that minimize those empty 
shelves in stores. America owes these folks a debt of gratitude and a 
celebration of their heroics.
    On exports, Intel has faced many of the same challenges others have 
faced with some complicating factors. For example, the Administration's 
100 Day report on the Semiconductor Supply Chain \9\ highlighted the 
fact that complex chipmaking supply chains entail transporting 
intermediate stage and partially completed chips across borders 
multiple times. Certain inputs have experienced particular delays or 
only a small number of suppliers have been able to meet the tough 
requirements of supplying inputs for chip making, including substrate 
for semiconductors and wafer blanks. Intel commends the Administration 
for its outstanding analysis of these issues in the 100 Day report, and 
for its ongoing efforts to work with Congress to approve funding for 
the CHIPS for America Act.
---------------------------------------------------------------------------
    \9\ Building Resilient Supply Chains, Revitalizing American 
Manufacturing, and Fostering Broad-based Growth, The White House, June 
2021, available at https://www.whitehouse.gov/wp-content/uploads/2021/
06/100-day-supply-chain-review-report.pdf.
---------------------------------------------------------------------------
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Marsha Blackburn to 
                             Pat Gelsinger
    Question 1. In March, Senator Kelly and I introduced the Micro Act, 
which aims to provide for a comprehensive and integrative program to 
accelerate microelectronics research and development at the Department 
of Energy. Senator Kelly and I believe this legislation will be key for 
securing America's future as the leader in semiconductor manufacturing. 
Will you commit to working with us on this important legislation?
    Answer. The Micro Act focuses on important opportunities to enhance 
U.S. R&D and to accelerate technology transfer in critical research 
areas. The Department of Energy has long played an essential role in 
partnering on research efforts to support its demanding requirements 
for semiconductor power-performance. Intel sees particular value in the 
proposal to establish microelectronics science research centers--both 
because it focuses on important foundational research and because it 
promotes workforce development. The Micro Act would be a step forward 
for microelectronics research, especially in combination with the CHIPS 
for America Act. I respectfully suggest clarifying the ``Sense of 
Congress'' language in Section 3(1) of the Micro Act, which expresses 
concern about the future of Moore's Law. Intel sees a bright future for 
extending Moore's Law--a future that can be accelerated with 
investments offered by the Micro Act.

    Question 2. The semiconductor chip shortage showed how vulnerable 
our supply chains are in the U.S. to disruption, whether from a global 
pandemic or logistics issues. I am concerned this Administration has 
been unable to get policies over the finish line to help industries fix 
their supply chain problems. How does the semiconductor shortage inform 
policy actions the U.S. should take going forward to bolster our 
manufacturing supply chains?
    Answer. While many industries face similar pandemic-related or 
other disruptions, the situation with semiconductors is, uniquely, the 
result of state-sponsored competition for chipmaking capacity and 
semiconductor leadership. For our industry, the most effective policy 
measure the U.S. can take to bolster the semiconductor supply chain is 
to increase domestic chipmaking capacity and capability for chipmaking, 
especially at the leading edge. As challenging as today's problems 
seem, future disruptions could be significantly greater without prompt 
leadership and action from the U.S. government. A report last year from 
consulting firm Kearney highlighted the precipitous decline in the 
number of chipmakers at the leading edge: in 2003, more than two dozen 
firms made advanced chips, but today only three remain.\10\ Intel is 
the only American company among those three, and the only company in 
the world making advanced chips in high volume in the U.S. today. But 
our operations are not enough, and we need Congress to fully fund the 
CHIPS for America Act to stimulate more manufacturing capacity and 
semiconductor capability so that we build up both supply chain 
resilience and American technology leadership.
---------------------------------------------------------------------------
    \10\ Kearney, ``Europe's Urgent Need to Invest in a leading-edge 
semiconductor ecosystem,'' October 2021, https://www.kearney.com/
documents/291362523/291371424/Europes+urgent+need
+to+invest+in+a+leading-edge+semiconductor+ecosystem.pdf/f3ec1e30-b8ff-
b367-417c-62cf476342
ea?t=1636562554000

    Question 3. How will you ensure that the CHIPS Act dollars are 
allocated to a variety of different applications, technologies, and 
industries across the board that have been negatively impacted?
    Answer. The CHIPS for America Act directs the Department of 
Commerce to consider funding the construction, expansion, or 
modernization of a broad array of semiconductor manufacturing 
facilities, including wafer fabrication, advanced packaging, and 
assembly test facilities, as well as research and development, which 
are ``in the interests of the United States.'' The Department of 
Commerce also can take into account the grant applicant's 
``responsiveness to national security needs or requirements.'' Intel 
commends the authors of the CHIPS for America Act for identifying these 
important priority areas, as they will help ensure that U.S. 
investments are dedicated to areas that have been most negatively 
impacted by the ongoing supply-demand imbalance and that will benefit 
the most from CHIPS for America Act investments.
    We note that one of the main motivations behind the CHIPS for 
America Act was the major decline in the U.S. share of semiconductor 
manufacturing, from 37 percent in 1990 to less than 12 percent today 
with no capacity at the leading edge. Thus, supporting new fabs with 
CHIPS for America Act grants is critical, especially since such 
investments will ensure that grant dollars flow through the entire 
chipmaking ecosystem. However, Intel recently announced efforts to 
diversify its offerings with a pending acquisition of one of the 
world's leading providers of foundry services for mature and analog 
chips. If Intel secures funding under the CHIPS Act, it will support 
our ability to accelerate and help address this unmet demand.

    Question 4. I am an original cosponsor of Senator Peter's 
legislation, S. 3331, to clarify that CHIPS Act funds may be utilized 
to support upstream manufacturers. Do you share our concerns with 
America's reliance on other countries, particularly China, for critical 
material inputs, including polysilicon, that are essential to the 
semiconductor supply chain?
    Answer. We support Congressional efforts to ensure we have a strong 
U.S. semiconductor ecosystem. Building a semiconductor fab without a 
secure supply of chipmaking materials or chipmaking equipment would be 
like building a Chick-fil-A restaurant without a secure supply of 
chicken to purchase. Senator Peter's legislation is an important 
recognition that the semiconductor supply chain is complex and multi-
phased, and a large portion of grants directed at semiconductor fab 
expansion or new fab construction will necessarily be used to purchase 
manufacturing equipment and materials. This is due to the significant 
expense of the equipment needed to fabricate chips. For example, public 
news reports describing Intel's technology development plans estimate 
the cost of current EUV lithography machines at around $150 million 
each, while such machines for future generations of chipmaking will 
cost around $300 million each.\11\
---------------------------------------------------------------------------
    \11\ See ``Intel orders ASML system for well over $340 mln in quest 
for chipmaking edge'' at https://www.reuters.com/technology/intel-
orders-asml-machine-still-drawing-board-chipmakers-look-an-edge-2022-
01-19/.

    Question 5. Automated vehicles (AVs) require cutting-edge 
processors to handle the computing loads present in software. The U.S. 
currently leads the market for AV development and the design of chips 
that are capable of facilitating the advancement of the U.S. autonomous 
vehicle sector. Why is this investment critical for the U.S. to remain 
the word leader in AVs?
    Answer. The U.S. can benefit from continued advancements and 
innovations in automotive technology as autonomous vehicles will be an 
essential part of the future of safety and mobility. However, enabling 
the widespread benefits of AVs and other transformative technologies 
will require additional semiconductor production and capacity.
    Broadly speaking, cutting edge processors will be required to 
enable U.S. leadership in autonomous vehicles--and also for other 
essential-to-win applications ranging from artificial intelligence (an 
essential enabling technology for autonomous vehicles), quantum 
computing, advanced telecoms networks, high performance computing, and 
others. Until recently, the U.S. was the decades-long leader in 
cutting-edge processors. CHIPS for America Act investments will help 
put the U.S. on equal footing with other countries who have offered 
significant incentive programs for years.
    The chart below from a report by consultancy Kearney shows what is 
at stake for the U.S. As chipmaking advances for important technologies 
such as autonomous vehicles, fewer and fewer companies can keep pace 
with the capital investment and R&D required to compete. Since 2003 
there have been roughly half a dozen generations of advances in 
chipmaking technology, but fewer and fewer companies have been able to 
stay at the leading edge.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Question 6. How do siting, permitting, and other infrastructure-
related issues slow down your ability to open and operate new 
facilities?
    Answer. In our response to the Department of Commerce's request for 
input on implementing the financial assistance program under the CHIPS 
Act, Intel made clear that delays in the Federal permitting of new 
semiconductor facilities supported by CHIPS for America Act could 
seriously undermine the objectives of the law.
    Specifically, we recommend that the Federal government should 
further expedite, or better yet exclude, any applicable Federal 
permitting requirements under the National Environmental Policy Act 
(NEPA) for CHIPS Act-funded semiconductor projects, which can add years 
to the approval timeline. The current process to ``fast track'' NEPA 
requirements helps,\12\ but it is not enough in our dynamic industry 
because even in such cases it could take up to two years to receive 
required approvals. Such delays mean the U.S. could lose new projects 
to other locations that offer a more competitive cost structure without 
delays.
---------------------------------------------------------------------------
    \12\ See S. 3541, a bill to include certain computer-related 
projects in the Federal permitting program under title XLI of the FAST 
Act, and for other purposes; available at https://www.congress.gov/
bill/117th-congress/senate-bill/3451?s=2&r=4.
---------------------------------------------------------------------------
    Consequently, given the urgent need to strengthen our industry, we 
urge the Commerce Department to implement a definitive ``categorical 
exclusion''--at least for facilities already under construction where 
the environmental impact has been thoroughly examined under state law. 
The Department of Energy's experience with the Advanced Technology 
Vehicles Manufacturing Incentive Program (commonly known as the Auto 
Loan Program) is instructive precedent. In 2009, DOE applied 
categorical exclusions to manufacturing facilities that received 
Federal funding under the Auto Loan Program. DOE provided loans to 
automobile manufacturers and component suppliers for projects that 
reequipped, expanded, and established manufacturing facilities in the 
United States to produce light-duty vehicles. DOE and CEQ concluded 
that the activities contemplated under the Auto Loan Program were 
substantially like activities covered by the agency's existing 
categorical exclusions.\13\ As another best practice, the U.S. 
government also should look to the fast-track permitting process for 
environmental and other assessments that the European Commission is 
asking its member states to implement for first-of-a-kind semiconductor 
facilities as part of the newly published EU Chips Act.\14\ Analogous 
to our proposed categorical exclusion, the EU Chips Act also allows 
``derogations in permit granting procedures, including in certain 
environmental assessments'' if other conditions are met.\15\
---------------------------------------------------------------------------
    \13\ See Letters between Steven Chu, Secretary of Energy, and Nancy 
Sutley, CEQ Chair (Mar. 19 and Mar. 20, 2009) (relying on DOE 
Categorical Exclusion B1.31).
    \14\ See Communication from the Commission to the European 
Parliament, the Council, the European Economic and Social Committee and 
the Committee of the Regions, A Chips Act for Europe, at 17, COM (2022) 
45 Final (Brussels 8.2.2022); Proposal for a Regulation of the European 
Parliament and of the Council, European Commission 2022/0032, 
establishing a framework of measures for strengthening Europe's 
semiconductor ecosystem (Chips Act), at 7-8 (Brussels 8.2.2022).
    \15\ Proposal for a Regulation establishing a framework of measures 
for strengthening Europe's semiconductor ecosystem (Chips Act), Art. 
14.

    Question 7. Can you talk about the facilities Intel has opened in 
China over the past few decades, compared to the facilities Intel has 
opened in the U.S. over the past few decades?
    Answer. Intel operates a global factory network but we develop our 
manufacturing IP and capabilities primarily in the United States. Our 
advanced manufacturing research efforts are centered in Oregon, and we 
perform our advanced logic manufacturing at our fabs in the U.S., 
Ireland, and Israel.
    We rank sixth among publicly-traded U.S. companies in individual 
R&D investment.,\16\ In 2021, we invested $18.7 billion in capital 
expenditures and $15.2 billion in R&D.\17\ Overall, Intel's domestic 
operations directly contributed almost $26 billion to U.S. Gross 
Domestic Product (GDP) in 2019, with a total GDP impact to the U.S. 
economy of $102 billion. The majority of our manufacturing and R&D 
investments are in the U.S.
---------------------------------------------------------------------------
    \16\ ``Intel's Impacts on the U.S. Economy'', Report Issued April 
2021, using data for FY 2019, available at https://www.intel.com/
content/www/us/en/newsroom/news/us-economic-impact-
study.html?wapkw=economic%20impact#gs.tptln6.
    \17\ Intel Corporation Annual 10-K for Fiscal Year Ending December 
25, 2021, available at https://www.intc.com/filings-reports/all-sec-
filings/content/0000050863-22-000007/0000050863-22-000007.pdf
---------------------------------------------------------------------------
    Beyond our existing operations, Intel is making unprecedented new 
investments in U.S. semiconductor manufacturing capacity. In the last 
12 months alone, we have announced investments of $43.5 billion for the 
construction of new semiconductor fabrication facilities in Ohio and 
Arizona, and for the manufacturing of advanced semiconductor packaging 
technologies in New Mexico.\18\ This follows our recently completed $3 
billion investment to expand our operations in Oregon.
---------------------------------------------------------------------------
    \18\ See Intel Press Releases available at https://www.intel.com/
content/www/us/en/newsroom/news/intelannounces-next-us-site-landmark-
investment-ohio.html; https://www.intc.com/news-events/press-releases/
detail/1501/intel-breaks-groundon-two-new-leading-edge-chip-facto
ries; https://www.intel.com/content/www/us/en/newsroom/news/new-mexico-
manufacturing
.html.
---------------------------------------------------------------------------
    Our most recent U.S. announcement in Ohio amounts to a $20 billion 
investment for two new fabs at a new greenfield manufacturing site in 
Licking County, with the first fab coming online by the end of 2025 
(business conditions permitting). A full build-out of the Ohio site 
could include eight fabs and a $100 billion investment over the next 
decade, assuming support from CHIPS Act funding. The manufacturing 
operations at the Ohio site will produce chips using our most advanced 
transistor technologies. In addition to about 7,000 construction jobs, 
the two initial fabs are expected to create approximately 3,000 high-
paying full time Intel manufacturing and engineering jobs ranging from 
factory operators and equipment technicians to engineers and business 
support functions, many of which do not require a 4-year college or 
advanced degree.
    In contrast to our investments in the U.S., Intel opened just one 
fab in China in its history and we have never performed advanced logic 
manufacturing in China. The fab opened in 2010, equipped to build 
semiconductors (chipsets, not microprocessors) that were two to three 
generations behind the leading edge chipset technology that was in 
production at Intel's lead fabs outside of China. In 2015, Intel 
converted the fab to build memory products, and, in 2020, Intel 
announced the sale of the Dalian fab to SK Hynix; that sale is underway 
and is proceeding according to plan.

    Question 8. Can you explain your relationship with ByteDance? 
Please provide an explanation of your company's partnership with 
ByteDance to improve their AI systems and data storage.
    Answer. ByteDance purchases Intel commercial off the shelf (COTS) 
products.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Rick Scott to 
                             Pat Gelsinger
    Question 1. As seen in the response to Russia's unjust and unlawful 
invasion of Ukraine, the American people expect U.S. companies to stop 
doing business with murderous regimes. On top of its egregious human 
rights abuses, Communist China has made clear that it intends to invade 
Taiwan. If Communist China invades Taiwan, would Intel continue to do 
business with and in Communist China?
    Answer. Intel is an American company with a global footprint. We 
comply with all U.S. sanctions, regulations, and laws affecting its 
operations, sales of its products, and trade.

    Question 2. What is Intel doing right now to decouple its 
operations in Communist China and decrease its dependence on this 
market?
    Answer. As previously announced, Intel's primary manufacturing 
presence in China was a memory manufacturing fab in the City of Dalian. 
At the end of 2021, Intel announced completion of the first closing of 
the sale of its NAND and SSD business, including the Dalian, China NAND 
memory manufacturing facility. While Intel performs some assembly and 
test functions in China, we do not maintain any logic fabrication 
facilities in-country.

    Question 3. During the hearing, I asked what Intel's return on 
investment would be if Congress funded the CHIPS Act at $52 billion. 
You did not directly answer my question. (a) For the record, in exact 
dollar amounts, what would the expected return on investment to U.S. 
taxpayers be if the CHIPS Act is funded at $52 billion, of which Intel 
is expected to receive nearly $3-4 billion? (b) How will you ensure 
that any U.S. taxpayer investments in your company do not, in any way, 
benefit Communist China? (c) Will you commit to complete transparency 
with regard to Intel's use of any U.S. taxpayer funds?
    Answer. We approach projecting economic impact of investments in 
U.S. chipmaking by looking at Intel's impact in states where it 
currently maintains significant manufacturing operations. As 
highlighted in my written testimony:

   In California, our total annual economic impact is 
        approximately $24.9 billion, based on 2019 data. We have 
        donated nearly $90 million to support California schools and 
        nonprofits, and we employ more than 13,000 full time 
        equivalents (FTEs).

   In Oregon, our total annual economic impact is approximately 
        $19.3 billion, based on 2019 data. We are Oregon's largest 
        corporate employer with more than 22,000 FTEs, and we've also 
        invested more than $49 billion in capital since we first 
        arrived to support our operations in the state.

   In Arizona, our annual economic impact is approximately $8.6 
        billion, based on 2019 data. We've invested more than $23 
        billion in capital to support our operations in the state and 
        we employ nearly 12,000 FTEs there as of January 2021.

   In New Mexico, our annual economic impact in New Mexico is 
        approximately $1.2 billion, based on 2019 data. We've also 
        invested more than $16.3 billion in capital to support our 
        operations in the state and employ approximately 1,800 FTEs 
        there.

    Intel has announced $43.5 billion in major expansions or new fab 
construction in Arizona, New Mexico, and Ohio--projects which can be 
amplified, expanded, and accelerated by grants from the CHIPS for 
America Act programs. Intel will invest more than $3 for every $1 in 
CHIPS funding we would receive. In Ohio, for instance, we selected a 
site that could accommodate up to eight fabs, which will allow Intel to 
inject up to $100 billion in investment into the local, state, and 
regional economy.
    Without CHIPS for America Act funds, however, Intel likely would be 
forced to build fewer facilities at a slower pace in Ohio and may build 
the remaining fabs outside of the U.S. (e.g., Germany, Ireland, or 
Israel). The chart below illustrates the tremendous economic growth 
that can be created by the U.S. government providing grants through the 
CHIPS for America Act. The chart uses Intel Arizona operations 
(comprising four operating fabs and generating about $8.6 billion in 
annual economic impact) as a baseline to project the annual effect of 
grants on the economic impact from Intel's planned Ohio fabs. Without 
CHIPS for America Act grants, economic impact in Ohio would fall by 
half (assuming Intel can build only two fabs); with CHIPS for America 
Act grants, the economic impact doubles (assuming grants enable 
building up to eight fabs in Ohio).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Moreover, and more specifically, a single new fab in the U.S. will 
contribute roughly $4.0--$4.5 billion in Federal income and payroll 
taxes over 10 years (dependent upon product mix and whether the fab is 
operating at max capacity). Support from the CHIPS for America Act that 
enables the construction of eight new fabs could result in $32 billion 
to $36 billion in Federal tax revenue.
    CHIPS for America Act grants will have a multiplying effect, 
unlocking many more billions of dollars in private sector investment. 
For example, a single leading-edge fab may cost $12 billion in capital 
investment over its first 10 years, and the Department of Commerce may 
award up to a cap of $3 billion for such a project (the maximum allowed 
per project under the CHIPS for America Act), leaving other sources to 
fund the remaining $9 billion or more, which would be at least 3x the 
U.S. Government's investment. Beyond the initial capital investment, 
the CHIPS for America Act grants would also unlock enormous ongoing 
spending on operations and eventual retooling of a fab--spending in 
excess of $12 billion over the first 10 years. This means that private 
investment to build, to equip, and to operate a leading edge fab over 
its first 10 years would be about 6X that of the U.S. government's 
grant ($18 billion vs. $3 billion or a 6:1 investment ratio).
    Thus, in building a leading edge fab, Intel and other investors 
involved would take the vast majority of the financial and economic 
risk.
    Intel commends the authors of the CHIPS for America Act for 
including robust transparency and claw back mechanisms in the 
legislation authorizing grants, including provisions requiring that 
grant recipients meet committed timelines, have a viable plan to 
sustain the federally subsidized project long term, and avoid certain 
research and technology licensing with a foreign entity of concern.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Shelley Moore Capito to 

                             Pat Gelsinger
    Question 1. The COVID-19 pandemic highlighted the fundamental 
fragility of the semiconductor supply chain and the risks of 
concentrating the manufacture of these critical components in only a 
few geographic areas. Emerging technologies and innovative 
infrastructures, such as 5G/6G and smart electrical grids, will require 
the smallest and most complex processors. So the issues we are seeing 
today will only worsen as the demand for more advanced chips increases.
    Answer. America's leadership and future competitiveness in advanced 
technologies such as artificial intelligence, quantum computing, high 
performance computing, autonomous mobility, and 5G and beyond, requires 
the U.S. to have domestic chipmaking ability at the leading-edge chips. 
It is imperative that the U.S. position itself to win in advanced and 
emerging technologies. For the U.S. to succeed, the U.S. must increase 
resilient, stable access to semiconductors fabricated in the U.S.--
especially domestically manufactured leading edge chips that are the 
foundational blocks of emerging and innovative technologies.

    Question 2. In your testimony, you mention Intel's new investments 
in the United States--like the new fabrication facilities in Ohio and 
Arizona and the packaging facility in New Mexico. As we come out of the 
COVID-19 pandemic, what are some of the lessons learned to ensure that 
that we do not experience the same shortages?
    Answer. The most important lesson may be that COVID laid bare the 
state of the semiconductor supply chain, but COVID was not the main 
cause of chip shortages. The semiconductor shortage is the result of 
years of underinvestment in chip fabrication capacity in the United 
States. New investments in fab capacity will correct this situation 
eventually, but it will take time. Funding the Chips for America Act is 
crucial to unlocking billions of dollars of private investment in 
chipmaking capacity in the U.S. by competing with jurisdictions who are 
actively wooing semiconductor manufacturers to their shores with 
billions of dollars in subsidies.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Question 3. What is the average length of time it takes to build a 
new fabrication facility?
    Answer. Generally, it takes 2-4 years to build a new fab, but that 
time may be extended by Federal permitting approvals triggered for 
projects receiving CHIPS Act grants. In its response to the Department 
of Commerce's request for input on the grants program, Intel made the 
following recommendation:

        The Federal government should also expedite any applicable 
        Federal permitting requirements under the National 
        Environmental Policy Act (NEPA) for these projects, which can 
        add years to the approval timeline. Such expediting can only be 
        partially accomplished with fast-track permitting approval,\19\ 
        but even in such cases it could take up to two years to receive 
        the go ahead. In the meantime, the U.S. could lose out to 
        another location that offers a more competitive costs structure 
        today.
---------------------------------------------------------------------------
    \19\ See S. 3541, a bill to include certain computer-related 
projects in the Federal permitting program under title XLI of the FAST 
Act, and for other purposes; available at https://www.congress.gov/
bill/117th-congress/senate-bill/3451?s=2&r=4.

        Thus, preferably, given the urgent need to strengthen our 
        industry, we believe the Commerce Department can implement a 
        definitive ``categorical exclusion''--at least for facilities 
        already under construction where the environmental impact has 
        been thoroughly examined under state law and is no longer 
        significant. The Department of Energy's experience with the 
        Advanced Technology Vehicles Manufacturing Incentive Program 
        (commonly known as the Auto Loan Program) is instructive 
        precedent. In 2009, DOE applied categorical exclusions to 
        manufacturing facilities that received Federal funding under 
        the Auto Loan Program. DOE provided loans to automobile 
        manufacturers and component suppliers for projects that 
        reequipped, expanded, and established manufacturing facilities 
        in the United States to produce light-duty vehicles. DOE and 
        CEQ concluded that the activities contemplated under the Auto 
        Loan Program were substantially like activities covered by the 
        agency's existing categorical exclusions.\20\ As another best 
        practice, the U.S. government also should look to the fast-
        track permitting process for environmental and other 
        assessments that the European Commission is asking its member 
        states to implement for first-of-a-kind semiconductor 
        facilities as part of the newly published EU Chips Act.\21\
---------------------------------------------------------------------------
    \20\ See Letters between Steven Chu, Secretary of Energy, and Nancy 
Sutley, CEQ Chair (Mar. 19 and Mar. 20, 2009) (relying on DOE 
Categorical Exclusion B1.31).
    \21\ See Communication from the Commission to the European 
Parliament, the Council, the European Economic and Social Committee and 
the Committee of the Regions, A Chips Act for Europe, at 17, COM (2022) 
45 Final (Brussels 8.2.2022); Proposal for a Regulation of the European 
Parliament and of the Council, European Commission 2022/0032, 
establishing a framework of measures for strengthening Europe's 
semiconductor ecosystem (Chips Act), at 7-8 (Brussels 8.2.2022).

    Question 4. What are some of the obstacles Intel has experienced 
when choosing a location in the United States?
    Answer. The process for selecting a site is a complex and iterative 
process that weighs many factors. For our greenfield fab site, Intel 
conducted a global search for potential locations and invited initial 
proposals from interested parties. Intel evaluated proposals against 
the following general criteria to arrive at final options:

   Availability of a sufficiently large plot of land that is 
        level and free of disturbances;

   Adequacy of required infrastructure (power, water, waste 
        water treatment, roads, etc.);

   Expected construction costs;

   Availability of public sector incentives;

   Talent availability and labor market;

   Maturity of the semiconductor ecosystem in the concerned 
        region; and

   Climate and geographic concerns (e.g., water availability, 
        flood risks, snow load risks, etc).
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Marsha Blackburn to 
                            Sanjay Mehrotra
    Question 1. In March, Senator Kelly and I introduced the Micro Act, 
which aims to provide for a comprehensive and integrative program to 
accelerate microelectronics research and development at the Department 
of Energy. Senator Kelly and I believe this legislation will be key for 
securing America's future as the leader in semiconductor manufacturing. 
Will you commit to working with us on this important legislation?
    Answer. Micron would be pleased to work with you and Senator Kelly 
on the Micro Act. Micron is supportive and appreciative of all efforts 
to support semiconductor R&D and secure U.S. technological leadership.

    Question 2. The semiconductor chip shortage showed how vulnerable 
our supply chains are in the U.S. to disruption, whether from a global 
pandemic or logistics issues. I am concerned this Administration has 
been unable to get policies over the finish line to help industries fix 
their supply chain problems. How does the semiconductor shortage inform 
policy actions the U.S. should take going forward to bolster our 
manufacturing supply chains?
    Answer. Investment in new domestic semiconductor manufacturing 
capacity is the most effective way to strengthen the U.S. semiconductor 
supply chain and minimize future disruptions. Funding provided through 
CHIPS legislation will be critical in helping the semiconductor 
industry launch a new, ambitious round of investment and manufacturing 
capacity expansion. Federal investments must be significant enough to 
offset the longstanding, substantial investments by Asian governments 
in their own countries' manufacturing capacity, as well as the 35-45 
percent differential in upfront start-up costs between the U.S. and 
Asia.
    For memory and storage specifically, incentives must account for 
the large scale of manufacturing required, as memory and storage fabs 
must produce at very high volumes consistently over time in order to be 
commercially viable over the long term. Multiple facilities are 
required to achieve this scale, each costing tens of billions fully 
equipped. Technological advancements also come with increasing 
complexity, requiring ever-higher capital and operating expenses on the 
part of memory and storage manufacturing companies.
    Furthermore, to ensure the long-term viability of the investments, 
manufacturing incentives must be coupled with an investment tax credit 
(ITC) included in proposals such as the FABS Act. While the CHIPS Act 
grant program as currently envisioned will help bridge the cost 
differential between the U.S. and Asia in start-up costs, a refundable 
ITC is critical to bridge the differential in ongoing costs required to 
operate a fab in the U.S. as compared to Asia. A refundable ITC will 
also provide an equitable and efficient means to allocate government 
funds toward strategic projects with the greatest potential to help 
build domestic semiconductor self-sufficiency and strengthen the 
semiconductor supply chain. In other words, the ITC will enable the 
government to provide a certain and scalable form of support for 
semiconductor producers to invest domestically in long-term 
requirements and ensure reliable supply.

    Question 3. What is the importance of memory in the semiconductor 
supply chain? Why is American leadership in memory semiconductors 
important?
    Answer. Memory and storage are an important pillar of the 
semiconductor industry and are critical to all parts of the U.S. 
economy and national security. They underpin virtually every compute 
system, and, by providing foundational capability for all data-centric 
infrastructure demand fueled by AI and 5G, unlock innovation across 
industries--from healthcare to automotive, communications and defense 
applications. In other words, advancements in memory and storage set 
the pace for technological development.
    Because of this, memory and storage have grown from approximately 
10 percent of the global semiconductor industry in the year 2000 to 
about 30 percent today. This trend is expected to continue and 
currently memory accounts for nearly 60 percent of the world's 300mm 
semiconductor wafer output. For example, 5G phones have 50 percent more 
memory (DRAM) and double the storage (NAND) content as compared to 4G 
phones. Despite this, U.S.-based chip manufacturing only accounts for 
two percent of global memory production. This follows a trend of steady 
decline for domestic semiconductor manufacturing. For example, in 1990, 
the U.S. accounted for 37 percent of global chip manufacturing 
capacity. Today, it only accounts for 12 percent.
    Therefore, investment in expanding U.S. memory and storage 
manufacturing and R&D capacity is critical to ensure that our country's 
industrial base will be able to not only produce devices that currently 
exist, but also develop new, innovative devices of the future that will 
be critical for U.S. national security and quality of life.

    Question 4. How will you ensure that the CHIPS Act dollars are 
allocated to a variety of different applications, technologies, and 
industries across the board that have been negatively impacted?
    Answer. Domestic investments in semiconductor manufacturing will 
support our ability to develop and supply products for industries, such 
as automotive, that have been impacted by supply chain shortages. By 
bringing advanced manufacturing back on shore, CHIPS Act dollars will 
help us to even more effectively support these partners.
    Micron is the leading supplier globally of auto-qualified memory 
and has been proud to continue on-time deliveries to our auto customers 
throughout the ongoing supply chain shortage. We benefit greatly from 
our relationships with industry partners and are committed to providing 
the highest quality products to our customers in a consistent and 
timely manner. While the United States continues to lead in research 
and development, advanced domestic manufacturing of leading-edge memory 
is non-existent. Growing a manufacturing ecosystem would substantially 
increase supply chain resiliency, and create long-term, stable jobs in 
the communities where advanced manufacturing fabs exist. Modern fabs 
cost $10 billion (about $31 per person in the US) to build directly 
employing approximately 1500 people with an additional 1500 contractors 
supporting the fab employed by associated suppliers. We estimate these 
high paying jobs have a multiplier effect of up to 5.7 on the 
community; thereby creating thousands more jobs.
    With respect to CHIPS Act investments more broadly, we should focus 
on areas where the U.S. can lead in a commercially viable manner in the 
long-term. To that end, the U.S. should invest in leading-edge process 
technologies and manufacturing--areas with the highest rate of change 
and highest level of complexity (capital intensity). Investments should 
be in leading-edge technologies, including cutting-edge process/
manufacturing steps like EUV, advanced dry etch, chemical mechanical 
planarization (CMP), and precision film deposition, given the longer 
lifecycle, lower risk of obsolescence, and longer time needed to secure 
a return on investment. Incentivizing domestic leading-edge 
manufacturing would generate cascading salutary effects for the entire 
U.S. industrial base by promoting faster adoption of new technologies 
creating resilience, cost efficiency, and flexibility to prevent or 
mitigate shortages when combined with improved demand signaling.
    It is also essential to note that a major investment in a new 
domestic fab will also be a powerful investment in the entire U.S. 
supply chain. Each fab would require tens of billions of dollars of 
capital expenses in manufacturing equipment, construction, and IT 
systems, as well as billions of dollars annually in operational 
expenses related to gases and chemicals, technical services, repair and 
maintenance, utilities, and other materials. These costs manifest as 
direct, sustained investment in the U.S. supplier base. A new domestic 
fab would also employ thousands in high-paying and highly technical 
jobs, creating a vendor ecosystem that would bring tens of thousands of 
additional jobs, including trade roles.

    Question 5. I am an original cosponsor of Senator Peter's 
legislation, S. 3331, to clarify that CHIPS Act funds may be utilized 
to support upstream manufacturers. Do you share our concerns with 
America's reliance on other countries, particularly China, for critical 
material inputs, including polysilicon, that are essential to the 
semiconductor supply chain?
    Answer. Micron is grateful for your support of S. 3331. We are 
supportive of all measures that would promote diversifying sources of 
critical material inputs and ensure that no single company, location, 
or region would be a chokepoint of critical material inputs. Efforts to 
develop alternative sources of supply, either domestically or among the 
U.S.'s international partners, will play an instrumental role in 
boosting the resilience of the U.S. semiconductor supply chain.

    Question 6. Automated vehicles (AVs) require cutting-edge 
processors to handle the computing loads present in software. The U.S. 
currently leads the market for AV development and the design of chips 
that are capable of facilitating the advancement of the U.S. autonomous 
vehicle sector. Why is this investment critical for the U.S. to remain 
the word leader in AVs?
    Answer. Semiconductors are indispensable to ensuring the advanced 
functionality and safety of AVs. As the auto industry continues its 
push for ambitious new AV capabilities, memory consumption will 
continue to increase for each vehicle. Today's autonomous vehicles 
already require more than 10 times the amount of memory and storage 
that previous generation cars used. An average car manufactured next 
year will contain memory chips worth approximately $1,000 and $3,000 of 
all chips. Therefore, expanded domestic memory and storage 
manufacturing and R&D capacity will help boost the U.S. auto industry's 
ability to innovate and maintain its leadership in AVs.

    Question 7. How do siting, permitting, and other infrastructure-
related issues slow down your ability to open and operate new 
facilities?
    Answer. Permitting regulations, particularly the lengthy assessment 
timelines they require, are part of the reason why the United States 
currently builds fabs at a slower rate than its competitors. Therefore, 
as part of its effort to invest in expanding semiconductor 
manufacturing capacity, the U.S. government must coordinate regulatory 
support across the local, state, and Federal levels to facilitate and 
expedite fab construction. More broadly, the government should review 
Federal permitting regulations to identify areas where they are 
redundant with state rules and may therefore be revised or harmonized. 
The EPA should also create new ``fast track'' permitting options that 
allow fabs to undertake some operational changes without being required 
to file environmental permit applications. A potential template for 
this approach is the State of Oregon's Plant Site Emissions Limit 
(PSEL) program.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Rick Scott to 
                            Sanjay Mehrotra
    Question 1. In exact dollar amounts, what would the expected return 
on investment to U.S. taxpayers be if the CHIPS Act is funded at $52 
billion?
    Answer. Analysis conducted by the Semiconductor Industry 
Association (SIA) and Oxford Economics has estimated that a $50 billion 
dollar incentive package similar to that planned under CHIPS could 
generate $25 billion per year in expanded GDP per year between direct, 
indirect (supply chain), and induced (wage spending) economic activity 
in the first six years following the passage of such a policy. Micron's 
own economic impact analyses of U.S. projects under consideration 
indicate that GDP contributions of projects supported by CHIPS are 
likely to be at least as high in years seven through ten following such 
a program as semiconductor companies ramp their operations.
    Data collected by the OECD suggests that the United States has a 
tax-to-GDP ratio of on average 25 percent. Based off of this, and the 
assumptions above, taxpayers would expect to receive an additional 
$6.25 billion in tax revenue per year based on the program. Under these 
assumptions, such a program would fully pay itself off for taxpayers 
after eight years in dollar terms alone, with additional revenue 
benefits accruing to taxpayers in the years that follow. Over the first 
ten years of such a program, taxpayers would expect to receive $12.5 
billion in excess tax revenue, with the total increasing further in the 
years that follow with tax receipts having effectively paid of the 
``principal'' of government investment.
    This is to say nothing of the benefits to employment, innovation, 
national security, and economic resiliency that would result from such 
a scenario. SIA/Oxford projects that such an investment by industry 
would generate 185,000 temporary jobs during fab construction plus 
42,000 direct industry jobs and 280,000 permanent jobs in the U.S. 
economy by the end of their analysis. Relocating supply chains to the 
United States would provide resiliency to the U.S. economy in the event 
of further geopolitical and economic dislocations around the world, 
providing further upside to U.S. voters.

    Question 2. How will you ensure that any U.S. taxpayer investments 
in your company do not, in any way, benefit Communist China?
    Answer. Micron has never fabricated semiconductors in China and has 
no plans to do so. CHIPS legislation funding would support Micron's 
ongoing efforts to expand semiconductor manufacturing and R&D 
capabilities within the U.S. and contribute to the development of a 
strong domestic STEM workforce that can meet the needs of the economy 
of the future. As an example of this, in January 2022, we opened a new 
memory design center in Atlanta, Georgia that will create up to 500 
jobs across various STEM disciplines in the coming months. CHIPS 
funding would also strengthen U.S. national security by bolstering the 
resilience of our supply chains and ensuring that the U.S. industrial 
base can access the semiconductor supplies that it needs to drive our 
economy and maintain American technological leadership.
    Micron supports the robust taxpayer protections and claw-back 
provisions included as part of the CHIPS Act. We will work closely with 
the Department of Commerce as they codify these policies and fully 
comply with all requirements.

    Question 3. What is your plan to limit risk in Communist China by 
decreasing your business there? Do you plan to stop doing business in 
Communist China?
    Answer. Micron has never fabricated semiconductors in China and has 
no plans to do so. In fact, we were founded in Boise and grew by 
consolidating the industry. Our facilities in China are only 
responsible for performing packaging, testing, and assembly operations 
for of our products. If we do not sell to our customers, our foreign 
competitors would take our place, especially as a significant portion 
of these products are industry-standard products that are compatible 
between all the memory suppliers. We are careful to maintain our global 
competitive edge and take aggressive measures to protect our IP around 
the world.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Shelley Moore Capito to 

                            Sanjay Mehrotra
    Question 1. My colleague Senator Rosen and I launched the Senate's 
first Women in STEM Caucus which focuses on advancing women's 
participation in science, technology, engineering, and math (STEM) 
education and careers. STEM fields are where the in-demand jobs are 
right now and where they will be in the future. I believe that is it is 
incredibly important for us to develop a STEM workforce to meet the 
workforce demand we will see in the near future.
    Answer. Micron agrees that the semiconductor industry has an 
essential role to play in creating a STEM workforce that will meet 
future demands, particularly with women and other underserved 
populations. Micron has developed several initiatives supporting 
women's participation STEM fields, including the ``Girls Going Tech'' 
program, which focuses on younger students, and the ``Women in 
Technical Career Events'' initiative, which is tailored to students 
Grades 9-12. In addition, through our Global Women's Mentorship 
Program, Micron is working to increase the pipeline of young women 
applicants in the industry by inspiring future talents. Micron also 
takes pride in collaborating with the Society of Women Engineers to 
determine how Micron can best contribute its leadership in cultivating 
a STEM workforce that truly represents our country.
    Micron has also launched a ``Rural STEM'' initiative aimed at 
helping students in rural communities gain a deeper understanding of 
STEM disciplines. Micron also plans to establish a cybersecurity 
scholarship program designed to allow rural and community college 
students to gain a degree without physically being on a college campus.
    More broadly, through the Micron Gives STEM Education program, 
Micron is dedicated to investing up to $10 million over the next five 
years through Inspire Learning Grants to connect students to the 
careers of the future.
    Based on Micron's successful experience with the above initiatives, 
greater Federal funding to support STEM education could make a 
tremendous impact on building a workforce that our country needs to 
grow and remain competitive in the future. The U.S. Government should 
continue and expand funding to increase STEM education at all levels, 
enable the expansion of vocational programs at community colleges, 
promote re-skilling programs, and facilitate public-private 
partnerships to train and employ new entrants in the industry.

    Question 2. How has Micron developed the STEM workforce you need at 
your company?
    Answer. Micron has developed a wide variety of programs to build 
the workforce needed for our future growth. We have committed to 
providing approximately 10,000 enhanced career opportunities over the 
next three years through apprenticeships, work-based learning programs, 
continuing education, on-the-job training, and re-skilling. For 
instance, we have partnered with nonprofit group Year Up to administer 
a program to help prepare talent for joining the workforce. After six 
months in the program, participants are given an internship at Micron. 
Qualified candidates are then given full-time technician offers.
    Micron is also planning to design a similar internship pathway 
targeted specifically at veterans. Veteran re-skilling and transition 
programs, such as SkillBridge, have been particularly successful for 
Micron--we have found that many of the technical skills that 
servicemembers in certain specialties develop are also strong 
foundations for success at our company. Over the years, we have 
recruited significant numbers of former service members.
    On a longer-term basis, Micron has partnered with academic 
institutions at all levels--K-12, community colleges, and 
universities--to build curricula; provide internships, scholarships, 
and the equipment and materials students need to prepare for work in 
today's industry; and help onboard them into long-term careers. Our 
university programming aims to provide industry-relevant curriculum for 
faculty, as well as learning experiences and research opportunities for 
students to encourage them to pursue engineering and keep them engaged 
through graduation.
    Our efforts have been focused on the communities where we are 
present, including the states of Virginia and Idaho. Micron's 
partnership with Northern Virginia Community College (NOVA) provides an 
illustrative example of how Micron has successfully partnered with 
community colleges. Micron partnered with Year Up and NOVA to create a 
Fab Lab and a Mechatronics A.A.S. and Certification, which is targeted 
towards underrepresented groups and unemployed/underemployed young 
adults. Micron representatives also serve on NOVA's board--in general, 
many Micron employees serve on several K-12 education foundation boards 
and higher education Career & Technical Education (CTE) advisory 
boards. Micron's engagement with Norfolk State University (HBCU) and 
our financial support of the Micron Cleanroom has also allowed for a 
semiconductor certification program for students and veterans.
    In addition, through a joint initiative with Boise State 
University, Micron is helping build long-term student programs and 
career centers to recruit, retain, and graduate more STEM students, 
especially those from underrepresented and rural backgrounds.

    Question 4. You mention the partnerships between Micron's memory 
design center in Atlanta with leading institutions and universities in 
Georgia. Toyota Motor Manufacturing has a similar partnership with 
Bridge Valley Community and Technical College which has built a 
pipeline for students to go from the classroom to an in-demand, well-
paying career.
    Answer. We are eager to expand our partnerships with universities 
wherever we operate, as these programs help us to attract and develop 
the best talent that our country has to offer. Expanded manufacturing 
operations in the United States by the CHIPS Act would rely on 
manufacturing training initiatives at community colleges similar to the 
partnership that you mention. For example, as part of the development 
of our new memory design center in Atlanta, we are working to establish 
strong partnerships with many institutions in the region including 
Emory University, Georgia Tech, Morehouse College, Spelman College and 
University of Georgia. Semiconductor manufacturing at scale requires 
thousands of technicians trained to perform complex tasks in clean room 
environments that are sealed and purified to prevent contamination that 
leads to manufacturing defects. Expanding the existing U.S. clean room 
workforce will be a major priority for industry and for Micron if 
policy conditions support an expansion of domestic semiconductor 
manufacturing capacity.

    Question 5. How can the United States encourage and support similar 
partnerships across the United States?
    Answer. The strongest step that the U.S. government can take to 
support the development of similar partnerships is to introduce 
policies promoting domestic investment such as CHIPS Act funding, which 
includes new support for workforce development initiatives, and an 
Investment Tax Credit for semiconductor manufacturing. Large companies 
factor in employment requirements to investment decisions and work 
closely with federal, state, and local governments and institutions of 
higher education to develop employment pipelines similar to the 
partnership between Toyota and the Bridge Valley Community and 
Technical College that you mention.
    Additionally, the U.S. Government should expand funding to promote 
re-skilling programs and facilitate public-private partnerships to 
train and employ new entrants to the industry in the immediate term, 
while also increasing funding for STEM education and promoting the 
expansion of community college vocational programs in the longer term. 
In all of these efforts, close collaboration with industry will ensure 
the investments align with employers' evolving requirements and provide 
the foundation for long-term, productive employment.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Marsha Blackburn to 
                               Tim Archer
    Question 1. In your testimony, you noted that the Micro Act will be 
an important tool in streamlining coordination and better deploying 
Federal resources, including the National Labs. Can you explain why the 
Micro Act is key to securing America's future as the world leader in 
deploying next generation microelectronics?
    Answer. A robust domestic semiconductor supply chain has become 
vital for U.S. national security and global competitiveness. While the 
U.S. industry accounts for nearly half of total global chip sales, much 
of the actual manufacturing of this critical technology takes place in 
facilities overseas.\1\ To achieve a secure domestic supply line for 
microelectronics, the U.S. must make significant investments in 
research to expand the capacity of semiconductor equipment supplier 
companies responsible for making the sophisticated and expensive 
machines used in the manufacturing process.
---------------------------------------------------------------------------
    \1\ https://www.semiconductors.org/wp-content/uploads/2020/09/
Government-Incentives-and-US-Competitiveness-in-Semiconductor-
Manufacturing-Sep-2020.pdf (pg 5)
---------------------------------------------------------------------------
    The Micro Act would address this need, leveraging an interconnected 
and collaborative set of universities in diverse geographic locations, 
national laboratories, and industry representatives. Of particular 
focus, the Micro Act would support plasma processing leadership in the 
semiconductor industry--a critical component of the process technology 
that enables the entire semiconductor ecosystem.
    This legislation would establish a government funding strategy for 
plasma processing in semiconductor manufacturing, targeted towards 
breakthroughs 5-10 years from now in order to strengthen the Nation's 
competitive advantage. Such a powerful innovation incubator would 
stimulate new technology, generate valuable U.S. intellectual property, 
and create products to further domestic leadership in the global 
market. For the country to retain this leadership position, we urge 
Congress to pass the Micro Act.

    Question 2. I am an original cosponsor of Senator Peter's 
legislation, S. 3331, to clarify that CHIPS Act funds may be utilized 
to support upstream manufacturers. Do you share our concerns with 
America's reliance on other countries, particularly China, for critical 
material inputs, including polysilicon, that are essential to the 
semiconductor supply chain?
    Answer. The Investing in Domestic Semiconductor Manufacturing Act 
(S. 3331) is a critical tool to bolster the U.S. innovation economy. 
Supply imbalances in the global market have demonstrated the necessity 
of an adequate and resilient supply of semiconductors to many large 
industries that comprise a substantial portion of our economy. To 
ensure a lasting, secure supply, we must take a holistic view of the 
value chain. Of critical importance, the CHIPS Act creates a new 
Federal policy to incentivize domestic semiconductor manufacturing 
through the Commerce Grant Program. The CHIPS Act will promote new U.S. 
fabs to meet growing global demand for semiconductors. These new fabs 
will be dependent on an adequate supply of semiconductor manufacturing 
equipment and materials. S. 3331 would provide the Grant Program the 
flexibility to incentivize new and expanded facilities to produce 
manufacturing equipment and materials and ensure that expanded U.S. 
production is not restrained by shortages of these critical components. 
Industry durability requires a whole-of-ecosystem approach. We are 
grateful policymakers have recognized this requirement and intend to 
bolster the supply chain broadly.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Rick Scott to 
                               Tim Archer
    Question 1. In exact dollar amounts, what would the expected return 
on investment to U.S. taxpayers be if the CHIPS Act is funded at $52 
billion?
    Answer. As one of the world's largest semiconductor equipment 
companies, with the majority of our manufacturing footprint in the 
U.S., we appreciate Congressional attention to competitiveness in the 
market and our position in the global ecosystem. U.S. leadership in 
semiconductor equipment is a strategic advantage for the country and 
one that we aim to advance. The research and development investments 
required to achieve and maintain U.S. competitiveness in semiconductor 
manufacturing technology has been overwhelmingly funded by the 
companies themselves--resulting in massive contributions to U.S. 
economic strength, jobs, and GDP. A thoughtful investment in the 
industry by the government will result in a commensurate economic 
benefit to the country. We expect the incentives and investments 
authorized in the CHIPS Act to significantly amplify industry's 
existing R&D efforts and provide significant return on investment to 
the U.S. economy and taxpayer.

    Question 2. How will you ensure that any U.S. taxpayer investments 
in your company do not, in any way, benefit Communist China?
    Answer. Federal expenditures supporting domestic facilities for 
semiconductor manufacturing as well as the equipment and materials 
critical to those facilities will strengthen U.S. competitiveness and 
should serve to bolster U.S. national security. Protecting the U.S. 
technological lead is of paramount importance to Lam and we support 
policy that protects critical technology, intellectual property, and 
ensures a fair and competitive playing field. As a proud American 
company, we inherently prioritize national and economic security as you 
do and welcome the opportunity to work together on these issues.

    Question 3. What is your plan to limit risk in Communist China by 
decreasing your business there? Do you plan to stop doing business in 
Communist China?
    Answer. As global leader in the semiconductor equipment market, Lam 
Research serves customers around the world. As earlier stated, 
protecting the U.S. technological lead is of paramount importance to 
Lam and we support policy that protects critical technology, 
intellectual property, and ensures a fair and competitive playing 
field.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Shelley Moore Capito to 

                               Tim Archer
    Question 1. You mention in your testimony that the U.S. has a 
robust semiconductor manufacturing base, but the cost of building and 
operating is 20 to 40 percent higher than in other countries.
    Answer. U.S. leadership in semiconductor manufacturing technology 
remains strong. With fabs in 18 states and more on the way, Congress 
has a unique opportunity to provide the level of support traditionally 
seen in other economies. Importantly, a resilient supply chain to 
support these fabs remains an imperative, making a whole-of-ecosystem 
approach a critical component of Congressional action. The U.S. remains 
the global leader in semiconductor manufacturing equipment. As Congress 
seeks to increase domestic chipmaking capacity, America's dominant 
domestic equipment base cannot be overemphasized.

    Question 2. What is your understanding as to why these costs are so 
much higher in the United States than in other countries?
    Answer. The rising costs associated with building and operating 
facilities which handle complex manufacturing processes have put the 
U.S. at a competitive disadvantage. In many countries, government 
incentives have emerged as a common and robust tool to drive industry 
investments in semiconductors.

    Question 3. What factor contributes to the most to this disparity?
    Answer. Foreign governments have recognized the semiconductor 
industry as the pathway to technological advancement and sought to 
attract and develop a home-grown industrial base. Investments in a 
domestic industry through subsidization, favorable taxation, and other 
incentives--combined with lower labor rates--have contributed to the 
disparity in operating expenses we see today.

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