What the CHIPS and Science Act means for higher education

Short recap: What is CHIPS?

It may feel like several major legislative/political stories ago, but CHIPS remains a big deal for colleges and universities. The Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS) and Science Act of 2022 is a $280B legislative package to support the U.S. semiconductor industry with new funding for manufacturing and research and development (R&D).

By all accounts this is a massive bill, drawing comparisons to the space race in terms of size, scope, and maybe even audacity. And while I don’t think children will climb into bed dreaming of their iPad running on an American-manufactured chip, there’s plenty of reason to be excited about the individual expense lines in this bill:

• $39B in semiconductor manufacturing incentives
• $10B to invest in regional innovation and technology hubs
• $1.5B for promoting and deploying wireless technologies

Full accounting can be found here: https://www.commerce.senate.gov/services/files/1201E1CA-73CB-44BB-ADEB-E69634DA9BB9

What does CHIPS have to do with higher education?

Taking cues from the principles laid out in the “Made in All America” Plan, the CHIPs and Science Act relies heavily on higher education for proper implementation without explicitly directing much funding toward post-secondary institutions. This turns the burden of engagement back to institutions-there are opportunities to engage and win funding from CHIPS, but it will require some extra leg work.

Research

The most relevant higher education section of the CHIPs Act is the founding outlays for the federal agencies involved with allocating research money. Under the Act, NSF will see an additional $81B over five years, with the U.S. Department of Energy getting $68B, the U.S. Department of Commerce getting $11B, and NIST getting $10B over the same time period. For universities engaged in semiconductor research, this promises to be a sizable windfall-not only will these agencies have more funding to distribute, but they are creating new channels through which institutions can access this funding (more on that below).

Talent development

But what about the student side? While CHIPS provides significant funding for workforce development, the types of talent required to fill critical roles in semiconductor research and manufacturing vary widely. Many of these jobs-ones that exist today and ones that will emerge as semiconductor technology advances-require a greater technical acumen than other manufacturing fields, a trend we unpacked last year in our series, Industry Futures: The Technological Advancements of the Digital Revolution. As we forecasted, jobs in smart manufacturing continue to rise in demand while employers seek more data-driven, tech-savvy, AI-curious talent.

Preparing students for these roles requires different-in-kind programming; not our traditional manufacturing programs, but also not full-blown technology programs. We further unpacked what skills these roles require and highlighted institutions that are preparing students for future CHIPs-era jobs in our brief, Advancements in Smart Manufacturing: How Advancements in AI and Automation are Changing Industry Skills Demand and the Future of Academic Programming.

What are the implications of CHIPS for higher education?

With little direct impact on higher education spelled out in the bill, we can try to parse out the broader implications of the CHIPS Act and consider how they may influence the decisions we make today in higher education. These are a few of the obvious areas worth discussing:

1. Will my institution be competitive for CHIPS-related research funding opportunities?

Before answering this question, let’s acknowledge that the research implications of CHIPS are massive. $170B across five years between NSF, DOE, DOC, and NIST (with some future money from NASA as well) represents a $83B investment over the baseline of what those agencies were already expecting. Universities can expect to be involved in a good amount of this funding—directly through grants and sponsored programs and indirectly through partnerships with national labs and industry.

Bigger research universities

Now for the tough news: most universities will need to think carefully before pursuing some of these research opportunities. Simply put, semiconductor research and manufacturing are highly specialized areas in which only a handful of established institutions operate.

The biggest barrier to new entrants into research and manufacturing in semiconductors is facilities costs. A semiconductor fabrication facility alone is estimated to cost between $15-20B, and the necessary research facilities aren’t too far behind that, with Level 5 cleanrooms (required for microchip research) starting out between $100-1K per square foot. While new CHIPS funding will offset some of these costs, the federal agencies continue to show a preference toward institutions with established facilities and track records of success when it comes to funding big-ticket, politically involved projects.

These areas also require more applied research than other fundamental research projects that federal agencies have funded in the past. NSF’s new Directorate for Technology, Innovation, and Partnerships is set to receive 25% of the total CHIPS outlay for the agency, suggesting a greater focus on applied and developmental research. We’re likely to see similar applications across DOE, DOC, NIST, and NASA.

Smaller or non-research institutions

But this doesn’t mean smaller research institutions will be left out entirely. Several programs earmarked through NSF, DOC, and NIST call for the creation of more regional “hubs” for semiconductor research and manufacturing—as we’ve seen in other examples from these agencies, larger research universities serve as the “hubs” and actively recruit other research universities to serve as the regional “spokes”.

Furthermore, the White House has placed an emphasis on new opportunities for Historically Black Colleges and Universities (HBCUs) to benefit from CHIPS research funding, with NSF likely leading the charge on this front.

2. Should my institution be developing/offering programming related to semiconductor manufacturing?

We created a decision matrix to help institutions decide if they have the right combination of in-house talent and regional demand to support such a program, and a more detailed audit is available upon request.

What we learned in the research that feeds this matrix is that high-tech manufacturing can be a double-edged sword for many institutions. While there is funding available from federal, state, and industry partners to develop and grow such programs, the initial startup costs can be a barrier for many schools. Faculty in these fields command larger salaries given their specializations. Plus, most programs require sufficient infrastructure for hands-on learning, which is increasingly expensive to build and maintain in the current economic state.

Furthermore, outdated perceptions of manufacturing jobs as “dark, dirty, and dangerous” mean institutions spend more time and resources selling these programs to students, with the risk of low enrollments never catching up to the program startup costs.

But for institutions with strong technological foundations and potential funding partners at the ready, these programs can be very attractive.

3. How is CHIPS related to STEM immigration policy, and what would a shift in those policies mean for my institution?

Semiconductor manufacturing requires highly skilled talent that the U.S. currently doesn’t produce at sufficient levels to achieve the ambitious aims of the CHIPS Act. And while CHIPS provides funding for workforce development, the desired speed to implementation suggests an immediate need for workers that can only be supplied from outside the U.S.

But current immigration policy doesn’t allow for the rapid hiring of the scale called for in CHIPS, nor do visa policies for workers already here provide a predictable pathway to staying in the U.S. It stands to reason that CHIPS will push immigration reform back into the political spotlight, with a particular focus on the kind of STEM talent needed to work in semiconductor fabrication.

So what does a revisiting of STEM immigration policy mean for higher education? The enrollment side would see the immediate impact of more favorable visa policies-students coming from other countries with greater opportunities to seek employment and remain in the U.S. afterwards would certainly increase the number of international students seeking degrees here.

But we would also likely see an increase in STEM-focused immigrants among the university staff ranks-eager postdoc and faculty candidates have been seeking opportunities to join U.S. universities in greater numbers and have primarily been blocked by disjointed immigration policies. This talent could come at a critical time for universities desperate to fill roles across both administrative and faculty functions, with specialized talent in STEM fields being among the most difficult to attract and retain today.