Government Partnership with the Private Sector Offers the Best Way Forward

The past several years have exposed immense vulnerabilities in America’s semiconductor, or chip, manufacturing and supply chain – putting national security and the nation’s competitive edge at risk. By now, most know that chips are electronic devices required to power everything from mission-critical technologies and applications to automobiles and washing machines. While the U.S. remains the leader in advanced semiconductor design and development, the production of chips has shifted primarily overseas.

According to the Congressional Research Service, the U.S. share of the semiconductor industry has been declining, falling from around 40% in 1990 to about 12% in 2020 – resulting in stalled factories, furloughed workers, and reduced access or increased costs for everything from cars to refrigerators, medical devices, smartphones, and military systems (NIST, 2022). To address this challenge, President Biden signed the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022 – intended to restore American leadership in semiconductor manufacturing, supply chain, and research and development.

In an effort to build a resilient and sustainable semiconductor and chipmaking supply chain in the U.S., $52 billion in Federal grants is available to industry leaders for manufacturing, and research and development initiatives – including a 25% investment tax credit, unlocking $24 billion of additional funding to offset costs against first-year profits (CHIPS for America Fund, 2022). The Department of Commerce’s CHIPS Program Office (CPO) will decide on the application process and the rules for how grants will be disbursed, dictating who gets how much money and for how long.

PUBLIC-PRIVATE PARTNERSHIPS ARE INTEGRAL TO ACHIEVING GRANTS MANAGEMENT SUCCESS

As the Federal government gears up to distribute grant funding to address chip shortages and pace with its adversaries, the need for a strong grants management system that focuses on modern technology, coordination, agility, and trust – will be vital to maintain America’s leading edge.

• A modern technology solution for grants management increases the CPO’s credibility when managing CHIP grant and loan guarantees. Leveraging emerging technologies such as artificial intelligence, blockchain, and sophisticated data analytic tools – create real-time insights and more precise and predictive forecasts about where funding can make the most impact. Industry partners can use their expertise and applied innovative technology to provide meaningful information on optimizing the grants management system.
• Improved coordination will enable faster and more efficient grants management during funding shortages, demand spikes, disruptions, and threats. The CPO’s grants management system should comply with Uniform Grants Guidance and deliver on the CHIPS Act’s strategic goals seamlessly while reporting compliance data transparently and flexibly to accommodate changes in law and policy.
• Through enhanced agility, grants management and distribution can pivot faster to meet rapid demand fluctuations or disruptions. The CPO can automate grant operations, manage risks, enhance reporting, and improve the impact and outcomes of CHIPS – all while ensuring appropriate reporting and accountability to protect taxpayer dollars. In addition, the CPO’s ability to respond swiftly to changing demand signals is elevated when government and industry work together.
• Trust must be at the foundation of America’s future grants management solution. Trust and transparency between industry and government will be crucial to identifying and resolving vulnerabilities early. Federal leadership that provides coordinated and definitive cybersecurity guidance through methodologies such as Zero Trust delivers actionable recommendations, timely assistance, and increased response to critical threats.

THE ROAD AHEAD

The Biden-Harris Administration, legislators, and industry all recognize the importance of the U.S. Federal Government leadership in developing and implementing a modern, secure American semiconductor and chipmaking supply chain. As the CPO foregoes the road ahead, finding a grants management system built on a foundation of modern technology, coordination, agility, and trust will be instrumental to its success.

Learn more about how REI Systems can advance your mission with grant management systems that automate processes.