CHIPS, Childcare, and National Security

By Sujai Shivakumar and Charles Wessner

Securing the future of the U.S. semiconductors industry is a national security concern. Semiconductors are ubiquitous, embedded in everything from toasters, smartphones, computers, and cars, to hypersonic guided missiles, advanced telecommunications infrastructure, and artificial intelligence. A robust semiconductor industry and resilient supply chain are essential contributions to the nation’s economy and defense. 

The problem is that the nation’s share of global semiconductor fabrication capacity has declined over the past several decades. Today, the United States is home to just 12 percent of the world’s semiconductor manufacturing capacity (down from roughly 40 percent in 1990). More concerning there is no U.S. based production of the most advanced chips that enable cutting-edge civilian and military technologies. Taiwan, which alone accounts for roughly 90 percent of the world’s advanced chip production, represents a major point of vulnerability especially given China’s recent assertiveness over claims to Taiwan but also for its position on a major earthquake fault line. 

Reflecting growing appreciation of these vulnerabilities, the CHIPS Act passed with bipartisan support in August 2022, with the goal of reducing U.S. reliance on foreign-made semiconductors—and ideally to do this in a hurry. CHIPS provides significant incentives designed to bring high-tech innovation in manufacturing and research back to the United States. 

Responding to CHIPS, a number of the world’s leading semiconductor companies, including Intel, Samsung, Micron, and TSMC, have already announced plans for new fab projects across the United States. Several of these projects have the potential to dramatically increase U.S. chip supply chain resiliency while providing substantial contributions to broad based regional economic development.

In keeping with this urgency, the Department of Commerce just launched its first application for CHIPS funding, focused on commercial manufacturing facilities. In announcing these guidelines, Commerce Secretary Raimondo noted that the program is “a national security initiative.” But reaching those national security goals will require developing a U.S. workforce that can meet the challenge of some of the world’s most advanced manufacturing. “We need more people in the labor force,” Secretary Raimondo said. “We right now lack affordable childcare, which is the single most significant factor keeping people, especially women, out of the labor force.”

Indeed, the rush to construct new semiconductor facilities and then staff them with high-skilled, technically competent workers comes at a time of severe labor shortages in the United States, especially in high tech manufacturing but also in construction. Unlike many developed  economies, the U.S. underinvests in childcare. This underinvestment is an impediment to growth in this key sector, one that has genuine national security implications. 

It is important to understand Commerce’s guidance on requiring semiconductor companies seeking CHIPS funding to provide workers access to childcare in this context. It is not, as some have wrongly argued, an issue of social policy. It is a pragmatic move, clearly aligned with the nation’s security interests, to grow the workforce necessary to get the fabs built and producing the chips on which our country runs. In past crises, we relied heavily on women to augment the nation’s workforce. In today’s world, reliable and affordable childcare is a valuable step forward to a more numerous, more diverse, and more effective high-tech workforce.

Sujai Shivakumar is director and senior fellow of the Renewing American Innovation (RAI) Project at the Center for Strategic and International Studies (CSIS). Charles Wessner is a senior adviser (non-resident) with the CSIS Renewing American Innovation Project.

Sujai Shivakumar
Director and Senior Fellow, Renewing American Innovation Project
Charles Wessner
Senior Adviser (Non-Resident), Renewing American Innovation Project