DEI killed the CHIPS Act

Story by Matt Cole and Chris Nicholson, opinion contributors

DEI—the identity-obsessed dogma that goes by “diversity, equity, and inclusion”—has now trained Google’s new AI to refuse to draw white people. What’s even more alarming is that it’s also infected the supply chain that makes the chips powering everything from AI to missiles, endangering national security.

The Biden administration recently promised it will finally loosen the purse strings on $39 billion of CHIPS Act grants to encourage semiconductor fabrication in the United States. But less than a week later, Intel announced it’s putting the brakes on its Columbus factory. The Taiwan Semiconductor Manufacturing Company (TSMC) pushed back production at its second Arizona foundry (called a fab). The remaining major chipmaker, Samsung, just delayed its first Texas fab. This is not the way companies typically respond to multi-billion-dollar subsidies.

What explains chipmakers’ ingratitude? In large part, frustration with DEI. Commentators have noted that CHIPS and Science Act money has been sluggish. What they haven’t noticed is that it’s because the CHIPS Act is so loaded with DEI pork that it can’t move.

The Act contains 19 sections aimed at helping minority groups, including one creating a Chief Diversity Officer at the National Science Foundation and several prioritizing scientific cooperation with “MSI’s”—minority serving institutions. A section called “Opportunity and Inclusion” instructs the Department of Commerce to work with minority-owned businesses and make sure chipmakers “increase the participation of economically disadvantaged individuals in the semiconductor workforce.”

The department interprets that as license to diversify. Its factsheet “Building a Skilled and Diverse Workforce” asserts that diversity is “critical to strengthening the U.S. semiconductor ecosystem,” adding, “Critically, this must include significant investments to create opportunities for Americans from historically underserved communities.” The department does not call speed critical, although the impetus for the CHIPS Act is that 90 percent of the world’s advanced microchips are made in Taiwan, which China is preparing to annex by 2027, maybe even 2025.

Handouts abound. There’s plenty for the left—requirements that chipmakers submit detailed plans to educate, employ, and train lots of women and people of color, as well as “justice-involved individuals,” more commonly known as ex-cons. There’s plenty for the right—veterans and members of rural communities find their way into the typical DEI definition of minorities. There’s even plenty for the planet: Arizona Democrats just bragged they’ve won $15 million in CHIPS funding for an ASU project fighting climate change.

That’s going better for Arizona than the chips part of the CHIPS Act. Because equity is critical, the makers of humanity’s most complex technology must rely on local labor and apprentices from all those underrepresented groups, as TSMC found to its dismay. Tired of delays at its first fab, it flew in 500 employees from Taiwan, angering local workers by claiming they weren’t skilled enough. With CHIPS grants at risk, TSMC caved in December, agreeing to rely on those workers and invest more in training them. A month later, it postponed its second Arizona fab.

Now TSMC has revealed plans to build a second fab in Japan. Its first, which broke ground in 2021, is about to begin production. TSMC has learned that when the Japanese promise money, they give it, and they allow it to use competent workers. It’s sampling Germany’s chip subsidies too, as is Intel. Intel is also building fabs in Poland and Israel, preferring risking Russian aggression and Hamas rockets to braving America’s DEI regime. Samsung is pivoting toward making its South Korean homeland the semiconductor superpower after Taiwan falls.

Uncle Sam’s not the only one who has money, and the world’s best chipmakers are tired of being pawns in the CHIPS Act’s political games. They’ve quietly given up on it. Intel must know the coming grants are election-year stunts to disguise failed legislation—they’re mere statements of intent. Even after due diligence and final agreements, the funds will only be released in stages as recipients prove they’re jumping through the appropriate hoops.

For instance, chipmakers have to make sure they hire plenty of female construction workers, even though only a million of the 11 million U.S. construction workers are women. They have to remove degree requirements and set “diverse hiring slate policies,” which sounds like code for quotas. They must create plans to do all this with “close and ongoing coordination with on-the-ground stakeholders.” They have to ensure childcare for female construction workers and engineers who don’t exist yet.

No wonder Intel politely postponed its Columbus fab and started planning one in Ireland. Meanwhile, Commerce Secretary Gina Raimondo was launching a CHIPS-funded training program for historically-black colleges.

Now the secretary is calling for a second CHIPS Act. Before that, let’s make the one we have usable. There’s an easy fix. A bipartisan group of lawmakers is already trying to pass a bill exempting CHIPS funding from the multiyear environmental review required by the National Environmental Policy Act. The same need for speed calls for adding in a veto of the Commerce Department’s diversity tag-alongs. All Congress has to do is insist it meant what it said in the CHIPS Act and no more: giving poor people opportunities isn’t a free pass to enact all of DEI’s pet causes, and especially not to make national security wait on them. What Congress didn’t give, Congress should be willing to take away.

Read More From: For A Free America

As America pursues national security by building a diverse workforce, China does it by building warships. The CHIPS Act’s current identity as a jobs program for favored minorities means companies are forced to recruit heavily from every population except white and Asian men already trained in the field; it’s like fishing in all the places you aren’t getting bites. This is the stuff declining empires are made of—too constrained by special interests to muster a defense as the enemy reaches the gates.

And then, instead of solving the problem, the people in charge try to cover it up long enough to win reelection. Don’t be fooled by the Biden administration’s upcoming weekend-at-Bernie’s act; the CHIPS Act is dead.

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