Architect of CHIPS Act Speaks on Its Impact
In an exclusive interview with EE Times, Keith Krach, former Under Secretary of State for Economic Growth, Energy, and the Environment in the Trump administration, speaks on the significance of the CHIPS Act, which has since been passed by the House in a 243–187 vote.
It has yet to be signed into law by President Joe Biden.
Along with former Secretary of State Mike Pompeo, Krach is one of the key people who helped shape the CHIPS Act. In May 2020, Krach’s effort led to an agreement by Taiwan Semiconductor Manufacturing Co. (TSMC) to build a $12 billion 5-nm chip fab in the U.S., the most advanced facility of its kind in the nation.
Krach is also an accomplished businessman as former chairman of DocuSign and co-founder of software company Ariba. Here are Krach’s thoughts on the impact the stimulus measures will have on the American semiconductor industry.
First of all, Keith, thank you very much for taking time out of your schedule today. I know you as the person who helped facilitate TSMC’s Arizona project.
It was one of the greatest collaboration experiences I ever had, whether it was as Under Secretary of State or CEO. It was about trust. TSMC opened their books to us. We opened our thoughts to them, and we made the $12 billion deal happen in two weeks’ time. Up to that point, it was the largest onshoring in U.S. history. It was based on our word to do our best in helping cover their incremental costs. The caveat was no guarantees because, literally, “this will take an act of Congress.”
Now you’re seeing the implications of that. Our objective was that TSMC’s announcement would provide the necessary impetus to spark four additional areas to further fortify a trusted supply chain. First, it would attract TSMC ecosystem suppliers, which it has. Second, it would persuade other chipmakers, particularly Intel and Samsung, to get off the dime and to build in the U.S., which has happened in a big way. In less than a year, Intel CEO Pat Gelsinger announced a $20 billion investment in Chandler, Arizona. Then Samsung came in with a $17 billion investment in Texas. And recently, Intel’s investing $20 billion in my home state of Ohio, which could grow to be $100 billion.
Third, we hoped to spur universities to start programs in semiconductor engineering. My alma mater, Purdue, has just announced a master’s degree program in semiconductor engineering. Fourth, we also believed TSMC was the crucial catalyst to design a bipartisan bill (CHIPS for America) providing the necessary funding to bring back American semiconductor manufacturing. We also hoped the deal would inspire Congress to pass the bipartisan Endless Frontier Act that we architected with Senate Majority Leader Charles Schumer and Senator Todd Young back in November 2019 to boost investment in high-tech research. Now these two bills are combined to make up the CHIPS and Science Act. It was good karma.