Live coverage here on cspan. Needless to say, our committee has been working very diligently on a lot of transformational policy. While were waiting for our colleague here, i think ill thank senator wicker again for his work on the chips and p science act. I think people may not remember but this committee i dont know how many amendments we processed. Sen. Cantwell ity know it was in the hundreds. It might have been in the 300s. But i definitely believe that that kind of regular order process was good for the institutioned good for institution, good for the debate about science, and hopefully people will continue in todays hearing to understand that and understand much of the debate that maybe wasnt as clear in a big public perspective as it was to all of us who were working behind the scenes daily to try to figure this policy out. Ok, well go ahead and get started and when my colleague gets here, hopefully hell be here soon, we will let him make his opening statement. But welcome, secretary raimondo. And director panchanathan. Thank you for being here with us today. I also want to mention that apparently there is a fema Emergency Alert test thats going to happen today so if everybody in the room gets a big alert message, thats what thats about. Not to be concerned about it. But Everybody Knows that its going to go off. So, a little more than a year ago, Congress Passed the landmark chips and science act and it was a clear commitment to americas competitiveness that we need to innovate in the United States. Clearly we were doing a lot in innovation, we were publishing a lot but we needed to translate more, patent more and really help our Manufacturing Base be competitive for the future. The two witnesses before us today led on the delivery of those commitments and are here to tell us today about the substantial progress their agencies are making during the first year of the implementation of this act. Weve already seen the chips and science act spur more than 200 billion in private Sector Investment from semiconductors across the country to other investments. And the federal governments role in this is so important because the commitment to the Chips Program office within the department of congress is generating more than 500 statements of interest from Companies Looking at new projects and innovation. So today well have a chance to ask the secretary about those proposals, building resiliency and longlasting Semiconductor Ecosystem in the United States. Since we have the chance to discuss this earlier, im pretty sure were going to hear today about how were never going to be in this problem again as it relates to legacy chips. That we are going to have a good plan to help on a supply chain doacht for that development for that, that our d. O. D. Stature is going to continue to be on the cutting edge of chips and i think youre going to tell us that the diversity of applications, the robustness of it, means that that ecosystem that we are trying to restore and grow is alive and well. Weve also seen n. S. Fmpt begin to roll n. S. F. Begin to roll out innovation engine with money going to planning grants to tap innovation across the country. I love that the director during our efforts basically coined the phrase, innovation anywhere, opportunity everywhere. And i definitely think that is what we were looking for in this both in the spreading of the amount of funding and in diversifying a work force opportunity across the United States. For example, in the state of washington, a spokane company won an award to advance energy decarbonization. We all know that innovation and expertise helps us generate jobs and tackle some of our most pressing problems. And we know that what we have to do on this committee, besides hearing from these Witnesses Today, is push our colleagues to fully fund the aspects of chips and science that were funded. In fact, the committees two previous attempts at competitive bills fell short because the funding was not realized. One, because we faced an economic down turn and the other just in our first, very first effort on competitiveness, also didnt make the mark from an appropriations perspective. So we know that our foreign adversaries are not waiting. We know that our strategic competitors are also moving ahead. And we need to make this investment to what we would say derisks the supply chain and makes sure that we are innovating and translating our science faster. As we look to the future, we need to Work Together to ensure that the u. S. Remains competitive in the global marketplace on other issues like Artificial Intelligence, 5g wireless systems and quantum computing. And that will require the United States to do a couple of things. The ability of the u. S. To produce and produce chips, to support this innovation. Thats why the advancement in hearing where we are with the applications is so important. Second, we need a resilient supply chain that with stand disruptions like we saw in the past, either geopolitical tension, natural disasters, global panchanathans, whatever pandemic, whatever. We need a more dependent supply chain. And a work force that is well skilled and technical to the tides of technology that are being produced today. I personally believe this is one of the biggest gaps left to be addressed in the chips and science act. We have some money both for Semiconductor Train and Work Force Training and work force advancement and some on the science side through n. S. Fmpt. But a lot n. S. F. But a lot more needs to happen. The United States, the jobs of tomorrow are here today, but the skill level of the work force to do them is not. And so the more that we can take advantage of the job creation thats happening by marrying that up, something the secretary knows from her days as governor, the more we can streamline that and marry that up together, the more this engine is going to rev and keep affecting the u. S. Economy. Today u. S. Manufacturers, only 12 of the worlds semiconductors, compared to where we were in the 1990s at 30 . So the question really today is, are we seeing the right level of investment to make a return to the market share that we think is important . My guess is were going to hear both from the private Sector Investment thats already been made and the robust response to the programs. Were going to hear that the investment wants to be in the United States. So, i think we cant emphasize enough how important it was to bring this manufacturing back, consumers saw car prices raise as much as 30 . Manufacturers werent able to get semiconductors, werent literally able to ship product. Supply chain resiliency also created deadlocks for other industries and impacted National Security. So, i hope that we will all Work Together on better tools for the future. Ill have some questions about that in the question and answer period. But the Semiconductor Industry today is facing a gap of 67,000 people by 2030. Thats just semiconductors. So i know we in my state, as it relates to just stem, have a gap of 60,000 workers across various sectors, not just semiconductors. So clearly we need to make the investments in the Scholarship Program and in the stem apprentices and work force for tomorrow to realize all this investment that is now being made in the United States of america. So welcome to our witnesses. Ill turn it over to my colleague, senator cruz, for his opening statement. Sen. Cruz thank you, madam chair, for calling this important hearing. And welcome, secretary raimondo, director panchanathan, for both being here today. Semiconductors drive our modern economy. From cell phones and cars to supercomputers and medical devices. These integrated circuits have been integrated into our daily lives. Before 2020, however, when we suddenly couldnt get enough of them, most of us probably didnt realize just how big a role these chips play. It became very quickly apparent that in terms of economic and National Security, just how dependent and vulnerable we are on semiconductors. Yes, we rely on these chips for Consumer Electronics and cars, but theyre also in just about every [fema alarms blaring] it works. Sen. Cantwell yep. I think your time is up, senator. [laughter] sen. Cruz we have an emergency in semiconductors. [laughter] thats a first. I believe i think our first witness is a semiconductor. You done . [laughter] no. [laughter] [fema alarming blaring] you have to shut it off. Yeah, you have to shut it off. [fema alarm blaring] [laughter] sen. Cruz as i was saying. [fema alarm blaring] [laughter] sen. Cruz with great trepidation, i observe that just about every advanced weapons system in our military rely on semiconductors and most of them are not made in the United States. Recognizing this, there was a fleury of legislative activity to onshore and nearshore Semiconductor Manufacturing last congress. Culminating in the chips and science act. Parts of this law, like the fabs act, which i cosponsored and enthusiastically supported, provided tax credits to incentivize chip investments in the United States. The final bill, however, also included a whopping 52 billion in direct subsidies from taxpayers that in my view would predictably lead to government bureaucrats picking winners and losers. At worst, this kind of industrial policy can be rief with political interference and waste and even at best it is often done poorly and inefficiently. Thats why i ultimately voted against the by, despite it bill, despite it containing a number of things i strongly support. Were already seeing a number of these concerns realized. When i speak to companies in texas, many of them bemoan how the Biden Administration has imposed extraneous nonstatutory conditions on receipt of taxpayer support. Commerce isnt just asking if youve got the best technology or the cheapest manufacturing process. Instead, the bureaucrats want to know if you have proper plans to subsidize child care, or to support affordable housing. You have adequately engaged with labor unions . Are your suppliers sufficiently diverse . None of these topics are critical to the fundamental question of whether you can build the best chip at the lowest price. Maybe these issues are relevant, but does anyone think that officials in washington know better than the engineers and the investors behind these projects . Moreover, none of these strings were included in the law. But theyve nonetheless been attached by the Biden Administration to try to enact by regulation things that they dont have the votes to pass through congress. As many Commerce Committee republicans noted in the letter that we sent to secretary raimondo in march, this teamed at backdoor Progressive Social policy will only serve to make domestic chip production more expensive, less competitive, and more reliant on taxpayer subsidies over private investment. More recently, an area of mange concern has been major concern has been the onerous environmental requirements under nepa and the potential for this environmental process law to drive up Compliance Costs for manufactures and significantly slow new construction. Thats why senator mark kelly and i led a bipartisan amendment to the National Defense authorization act to exclude from nepa the overwhelming majority of chipsfunded semiconductor projects. Secretary ray moppedo, i want to raimondo, i want to thank you for your support on that effort and for explicitly endorsing our amendment during your house testimony last month. Secretary raimondo, we have also had good conversations about the importance of a strong u. S. Chip industry. We both want to see americas innovative capacity soar, and we agree that using these taxpayer funds appropriately is immensely challenging. Fortunately states like texas are showing us a path forward here. Texas boasted an established ecosystem of innovators, world class universities, low taxes, and a permissive Regulatory Environment that enables companies to grow and to thrive. As a result, we have already attracted 61 billion in private, new Semiconductor Investments and created over 8,000 new jobs, making texas the center of u. S. Semiconductor manufacturing. Texas has a storied history in the invention and production of semiconductors. And were proud to help lead Americas Semiconductor renaissance and i would encourage the Commerce Department to look to the model in texas and to see how to make this broader effort more successful. Finally, its worth noting that the other half of the chips and science act, director panchanathan, the n. S. F. Does substantial work advancing basic science that helps expand our scientific knowledge. And thats important work. But im deeply concerned over what appears to be the increasing politicization of n. S. F. Funded science and the feedback loop and the scientific stagnation that is creating. Im especially disturbed by recent reports that n. S. F. Has to the tunes of tens of millions of dollars, been funding projects on how to counter, quote, populous narratives and socalled, quote, mis and disinformation, which seements like little more than fund seems like little more than fundk the pseudo science of censorship. I look forward to hearing from both of our Witnesses Today on how theyre implementing this very important law. The taxpayers put a lot of skin in this game and we all owe it to them to get it right. Sen. Cantwell thank you. Well start now with secretary raimondo. Welcome. I cant imagine what a busy time it is for you and the organization thats implementing this act. We appreciate your time being here today. Sec. Raimondo it is my pleasure to be here today. Thank you, chairwoman, and thank you, Ranking Member cruz, and members of the committee. Thank you for the opportunity to come talk to you about how were implementing this historic legislation and of course im so pleased to be here with panch, a fantastic n. S. F. Director. I do want to begin by taking just a second to share my condolences with senator feinsteins family. She was a pioneer and a role model for so many women like me. So i wanted to just take a second to say that. Because of your hard work, in large part due to you, chairwoman cantwell, and bipartisan support of the committee, the Commerce Department now has the honor and responsibility to invest 50 billion in our domestic Semiconductor Manufacturing and research and development. And i concur, this is an enormous responsibility and a massive amount of taxpayer dollars. We opened the application process in february, just a few months after you passed the bill, we have since received more than 500 statements of interest from 42 states, from manufacturers large and small. They outline proposals to manufacture chips and the relevant equipment and materials here in the United States. Very importantly, all of the 500 statements of interest, weve received over 100 applications or preapplications. In the last two weeks, we finalized and put out the guardrails to protect u. S. Government investments and bolster our National Security. Were also developing our chips r. N. D. Program to meet the unique r d program to meet the unique challenges to build a sustained r d pipeline, the standard of this is the Semiconductor Technology center or the nstc which we expect to launch this fall. So a great deal of activity since about a year ago that the bill was passed. And of course all of that research and Development Work were doing in collaboration with the n. S. F. The chips and science act also authorized two new programs, the Tech Hub Initiative and recompete, which we are administering through the e. D. D. A. E. D. Ampt. Weve received e. D. A. Weve received 400 applications for the tech hub grants. Its unbelievable. Ive never seen anything more oversubscribed. Later this fall, e. D. L. Will make e. D. A. Will make the announcements of the tech hub designations and then also invite an opportunity for additional funding for implementation. Similarly, were vifnting 2 investing 200 million in the recompete pilot program, to spur Economic Activity in geographically diverse and economicly disdressed communities complik less Distressed Community economicly disdressed communities across the country. We are making historically economically distressed communities across the country. If were successful, when were successful, the United States will become the premier destination in the world where new chip architectures can be invented in our research labs, designed for applications, manufactured at scale by welltrained, wellpaid American Workers, and packaged in the United States. So its a tremendous piece of work