At a House Intelligence Committee hearing on microelectronics last week, witnesses expressed a range of opinions on the proposal the Senate passed in June to provide $52 billion to bolster the U.S. semiconductor industry. Most of the funding would subsidize the construction and upgrading of fabrication facilities, while about a quarter would fund R&D activities, as authorized in the CHIPS for America Act. Two witnesses at the hearing, David Isaacs of the Semiconductor Industry Association and Will Hunt of Georgetown University’s Center for Security and Emerging Technology, endorsed the funding proposal as well as additional measures. However, former Deputy Under Secretary of Defense for Research and Engineering Lisa Porter suggested that if the aim is to resolve security issues in the microelectronics supply chain, it would be better to adopt a “zero trust” approach that emphasizes technical standards and system resilience rather than rely on a secure “enclave” of domestic manufacturing. She also warned that subsidies might not accomplish the goal of boosting the U.S. position in the industry because they could create supplies that do not match demands. “Any subsidy targeting a specific part of such a complex value chain, or, even worse, specific companies within the chain, will weaken the competitive forces of a free market that correct for poor performance and poor alignment with the market demand,” she said.
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