The CHIPS Act aims to strengthen the U.S. position in semiconductors.

• The CHIPS and Science Act provides billions of dollars in incentives to produce semiconductors in the US.
• The objective of the legislation is to enable the U.S. to regain its competitive edge in semiconductor production, similar to South Korea and Taiwan, due to the critical role that chips play in all industries.
• Michael Schmidt, head of the CHIPS Program Office, informed CNBC CEO Council members that the objective is to establish the U.S. as a crucial component in the business plans of chip manufacturers.

In recent years, the U.S. has lost its position as a global leader in semiconductors, producing only about 20% of the world's supply.

The U.S.'s dominance in the semiconductor market has decreased, with the country now producing only 10% of the global chip supply and none of the advanced semiconductors that are driving the next generation of technology.

The $52.7 billion CHIPS Act aims to help the U.S. regain its competitive edge in semiconductors by matching the efforts of countries like South Korea and Taiwan.

One strategically significant good for supply chains globally is an area where our country is not strong, according to Michael Schmidt, director of the CHIPS Program Office, who spoke to CNBC CEO Council members in a virtual event on Oct. 10. The CHIPS Act was a bipartisan acknowledgement that this status quo is not acceptable.

Schmidt, who was previously a senior advisor at the Treasury Department, is now in charge of distributing $39 billion from the legislation's funds towards manufacturing centers. He considers the bill a chance for the U.S. to close the gap.

To create an environment where ongoing investment in the semiconductor industry is attractive for the future, we as a country must be prepared to invest and utilize our available funding as start-up capital to establish a significant and scalable ecosystem.

The CEO Council members discussed the challenges that may arise for these projects, with the most pressing issue being the need to find skilled workers. Schmidt pointed out that the U.S. government's emphasis on semiconductors has helped increase visibility and attract college students to semiconductor manufacturing instead of other tech jobs. He also highlighted the success of American companies like Intel, AMD, and NVIDIA, as well as the funding provided by the CHIPS Act for worker development.

Despite President Biden signing the CHIPS Act into law over a year ago, many in the U.S. semiconductor industry are still waiting for the promised federal funding to flow into their projects. While the potential for federal funding has spurred some significant private sector investments in the semiconductor sector, many of those projects are dependent on receiving government aid.

Schmidt stated that although it is challenging to move the wheels of government, he believes that our rapid progress has forced our private sector counterparts and partners to keep up with us.

Schmidt stated that the office is currently collaborating with applicants and anticipates making significant advancements, which will be announced in the near future. He emphasized that this is not a typical government program where applications are processed, doors are closed, and funding decisions are made months later. Instead, this is a highly interactive, commercial experience.

Schmidt guaranteed CEOs that their funding would remain secure even if there was a change in the White House following the 2024 election.

Schmidt stated that the initiative is a national security matter and has garnered support from both sides of the aisle. He emphasized that his team is not composed of political appointees, and the operation will continue beyond the next term and for several years to come.

The government's emphasis on rebuilding this sector is for the long term.

"I want the United States to remain a core part of the business models of leading companies in the world, even after their investments have been spent," he stated.