Remarks of OSTP Director Arati Prabhakar at an Event Announcing Progress on the Implementation of the CHIPS and Science Act’s Funding of Semiconductor R&D

Thank you so much, Director Brainard.

Welcome to the White House!

For me, when I come to a semiconductor event like this, it’s a little bit like a reunion. And I see many, many, many layers of my history. I never thought I would be here with all of you at the White House. This is tremendous.

If all of you knew me 40 years ago, you would have found me writing my Ph.D. thesis in applied physics. My subject was semiconductors, and back then we knew great things were going to come from semiconductors. The industry was still new, but we knew good things were coming and look at where we are today.

Think about what semiconductors have made possible. Think about these astonishing AI systems. Think about Wi-Fi and GPS and Bluetooth—all of that enabled by semiconductors. Think about power electronics that make EVs possible. Think about the most capable military systems in the world—our military systems that are not possible without semiconductors.

Great things definitely happened in those four decades. But something else happened in those four decades. The American semiconductor manufacturing, which started in America, when I was finishing graduate school—it was still predominantly here in the United States. First, it globalized. That’s fine. But then, it got dangerously concentrated in just one part of the world. And that has enormous implications for our economy, our supply chains, and jobs, not just in the semiconductor industry, but for all the other industries that depend on semiconductors. And, of course, for our national security. A serious issue.

For four decades, we admired the problem. And then, in the summer of 2022, President Biden signed the bipartisan CHIPS and Science Act. I had not yet returned to public service at that point. I was at home in California—you could have knocked me over with a feather when we did this. We finally did this! It was astonishing.

And I think all of you know that a big part of the chips portion of CHIPS and Science is about manufacturing incentives. And if you have watched Secretary Gina Raimondo and her amazing team at Commerce—they have moved with urgency. They have moved with purpose and focus and great professionalism. They are using these financial tools to partner with industry to achieve national purposes with semiconductor manufacturing.

What that means is that we’re back in the game. And that’s how we’re going to win today. That’s part one. We’ve got to do that.

Chips R&D is part two, and what’s that all about? It’s about winning tomorrow. And let’s think about this. What is this R&D stuff? What’s going on here? We all know that R&D is how you make progress from one day to the next. It’s how you make every increment of progress.

But we also need to understand that R&D is where transformation comes from. And, in fact, that’s the whole history of this industry. If you look at our industry today, it is fabless companies and it’s EDA design tool companies, and it’s foundries and fabs, and it’s packaging and test. That industry structure was not handed down to us on stone tablets. It is the result of technology innovation, and then business innovation, and then more technology innovation that ratcheted up together.

Let’s geek out for just a minute. Many people in this room know that this industry was once vertically integrated companies that did everything in one place. And what happened was the design and manufacturing got so complex that it was impossible. And the VLSI design revolution came along. It gave us an abstraction layer between design and manufacturing. And when that technical advance happened, the EDA industry emerged. The fabless business model emerged, and the foundry business model emerged. That’s how we got to where we are today.

So now it’s 2024, and there are a few more disruptions coming down the pike. Design and manufacturing are starting to have to interact in complex ways, because it keeps getting more and more complex. What’s happening with intellectual property and chiplets, heterogeneous integration, advanced packaging and interconnect? These are the seeds of disruption and we’re going to need all of them if we’re going to build the extraordinarily complex systems that the market is going to call for.

And that’s what CHIPS R&D is all about. It is about creating the transformative pathways that drive the technology forward, but also can reshape the industry. We want to make sure that happens. We want to make sure that that happens in a way that creates advantage for our industry, but also advantage for America.

We want those advances to turn into new capabilities, new markets here at home, new factories, new jobs, more robust and resilient supply chains, that ultimately support our national security, both economically and militarily.

So, we could go do CHIPS R&D, and just do a little bit more research, and publish some papers. We could just do a little bit more of what industry was going to do anyway. We cannot do that.

We will not succeed unless we actually create these dramatic transformative capabilities. All the pieces are in place for that to happen. I look around this room, and I think about how many smart, capable people know the history, know the technology. All the ingredients are here.

So, it’s time to make it happen. It’s time to go big or go home, and we are definitely going to go big. So, thank you all so much, and it’s my great pleasure to turn the podium over to Secretary Gina Raimondo, who’s going to make it all go.

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