The CHIPS and Science Act, a bipartisan legislation signed by President Biden in August 2022, aims to bolster U.S. semiconductor supply chains with a $52.7 billion investment in the CHIPS for America Fund. However, the funding comes with a series of diversity, equity, and inclusion (DEI) requirements that have sparked debate.
Applicants seeking funding must meet DEI criteria, including developing equity strategies, promoting diversity, and ensuring accessibility. Critics argue that these requirements could hinder the law's objectives and discourage foreign investment in the U.S.
Rep. Jim Banks raised concerns about the DEI mandates, stating that prioritizing DEI could weaken America. The requirements include hiring ex-convicts, expanding opportunities for individuals with limited English proficiency, and supporting diverse suppliers.
Moreover, large grant applicants must provide child care for workers, ensure environmental justice plans, and operate with green energy preferences. These stipulations have been cited as roadblocks that may delay semiconductor projects and increase costs for manufacturers.
Despite criticisms, the White House defended the CHIPS and Science Act, highlighting its success in attracting new investments and creating job opportunities for Americans. The administration emphasized the positive impact of the legislation on the economy.
While the federal government has secured significant agreements with semiconductor industry players, some projects have faced delays. Intel, for instance, halted construction of a plant in Ohio, and suppliers postponed facilities in Arizona.
Intel expressed gratitude for government support and affirmed its commitment to meeting obligations. The company acknowledged the lengthy process of establishing semiconductor production sites and assured compliance with reporting requirements.
Overall, the DEI requirements tied to the CHIPS and Science Act have sparked a contentious debate within the semiconductor industry, with stakeholders weighing the benefits of diversity initiatives against potential delays and increased costs.
