‎Everyone in Washington wants a byte of chips law‎

‎Everyone in Washington wants a byte of chips law‎

‎Lobbyists are landing in Washington, hungry for chips and a piece of the Science Act – even if some bids are unlikely to be cut.‎

‎Washington is set to spend $52 billion to support the local microchip industry, and many companies are struggling to get salaries, some of which have nothing to do with microchips.‎

‎These include labor unions, social media company Snap, FedEx, home heating and cooling companies, cryptocurrency exchange Coinbase, and even the American Israel Public Affairs Committee.‎

‎The Chips and Science Act, which was passed with bipartisan support and signed into law by President Joe Biden last August, is designed to bring chip manufacturers back to the United States after decades of losing market share in Asia. The bulk of this money is expected to go to semiconductor companies like Intel and Samsung, which plan to build new fabrication plants on a large scale with the financial support of Uncle Sam.‎

‎But the new law has also attracted a branch of lobbyists remodeling a wide range of industries. Snap lobbyists, for example, would ask Washington to subsidize plans to make chips for their augmented reality glasses. And filing a lobbying disclosure doesn’t mean the company will ask for money.‎

‎Nevertheless, the flood of filings reflects the corporate free-for-all that occurs after Washington opens the Checkbook — especially at the start of the game, when only a few dollars in lobbying fees can yield serious consequences.‎

‎”It’s a low-risk and high-reward tactic,” said Scott Linkicom, director of general economics at the Libertarian Cato Institute. “Not going after this cash would be almost corporate mismanagement.‎

‎He pointed to organisations that could apply for money under the Chips and Science Act — “literally any or anything that touches a semiconductor in some way is eligible,” he said.‎

‎Josh Teitelbaum, lobbyist at Akan Gump Strausshauer & Field, says lobbying obsession is natural: the ecosystem around the U.S. chip industry is “far broader than just a handful of companies that do the actual fabrication.”‎

‎Teitelbaum is lobbying for chips and science dollars on ‎‎behalf of Snap‎‎, which runs the popular social media app Snapchat, as well as manufactures and manufactures GLASSES containing AR Tech. According to Snap spokesman Peter Bogard, the company wants to convince the Department of Commerce to send subsidies so that it can stateside the “leading semiconductor processing components” used in its AR products.‎

‎Teitelbaum suggested that Snap isn’t the only unexpected company struggling for a piece of chips and science money. “You might see some companies and industries weighing in that you can’t necessarily expect to be there,” Said Teitelbaum, “but all of this is just an indication of how chips are embedded in our daily lives.”‎

‎In addition to tens of billions of dollars in direct subsidies, the Chips and Science Act also allocates about $200 billion in funding for federal research institutions such as the National Science Foundation. That money is another huge amount for lobbyists — the majority still needs to be used by Congress, and Lancecom said “maybe a lot of people will lobby to make sure there’s actual appropriation.”‎

‎This holds true for the XR Association, a group that represents the growing and virtual reality industries that ran a successful campaign to enable “fantastic technology” for R&D funding under chips and science. The XR Association continued to ‎‎lobby on the law‎‎ in ‎‎the last months of 2022‎‎ — and the group’s director of public policy Miranda Lutz said it was now pressuring Capitol Hill to put money into these programs.‎

‎”We clearly want to see full funding for the NSF, [The National Institute of Standards and Technology] and some other agencies that will likely monitor the amount coming into the XRR&D,” Lutz said.‎

Big players

‎While the Snap and XR associations are open about their chips and science projects, this is not the case for most organizations lobbying on the law.‎

‎Distributed funding opportunities – billions of dollars in microchip subsidies as well as hundreds of billions of dollars in science agency permits – not only give lobbyists the opportunity to track two different funding flows. They also make it easier for companies lobbying on the law to hide whether they are more interested in direct subsidies or in the benefits derived from increasing the R&D budget.‎

‎Despite different business models, five of America’s biggest technology companies — Meta, Microsoft, Google, Amazon and Apple — lobbied for the implementation of chips and science in the last three months of 2022.‎

‎Of the five, Meta was the only one who clearly stated that he had no intention of seeking microchip subsidy from commerce. Meta spokesman Andy Stone said the company ‎‎paid lobbyists to‎‎ help them understand “the impact of legislation on our device manufacturing.”‎

‎Microsoft spokeswoman Kate Freshman, who ‎‎paid‎‎ two separate ‎‎lobbying firms‎‎ to work on the chips, said the company was only “monitoring” its implementation (the law allocated $1.5 billion for next-generation wireless technology, mentioned in a Microsoft filing). Google spokesman Jose Castaneda said the company supported chips and science before its approval last summer, but declined to explain Google’s ‎‎interest‎‎ in implementing the law.‎

‎Spokespersons for Amazon and Amazon Web Services — ‎‎both of which had lobbied‎‎ on the implementation of the chips in ‎‎the last months of 2022‎‎ — declined to comment on the company’s strategy (Amazon’s filing mentions “issues related to STEM education, computer science education and job training”). Apple spokespersons did not respond to multiple requests for comment about its interest in implementing the chips, but ‎‎the company’s fourth-quarter filing‎‎ mentioned “issues related to domestic manufacturing of semiconductors” as well as “information about Apple’s supply chain.”‎

‎Other major technology companies, including ‎‎software firm Salesforce‎‎ and ‎‎networking company Cisco Systems‎‎, lobbied Washington on chips and science late last year. Sales force spokesman Alan Tsai said the company was focusing on the law’s infrastructure, supply chain and manpower provisions. He also said that the sales force “has no intention of applying for the subsidy of the law.” A Cisco spokesperson did not respond to multiple requests for comment.‎

‎Casting Call‎

‎Large technology represents only a small piece of companies and organizations that lobbied on the implementation of chips and science. Top defence contractors such as ‎‎Northrop Grumman‎‎ and ‎‎General Dynamics‎‎ paid lobbyists to work on the law. Similarly to HVAC companies ‎‎such as Carrier‎‎ and ‎‎Train‎‎ (chipmaking requires advanced filtration technology and climate control systems, which may explain their interest).‎

‎The implementation of this law is a potential benefit for a wide range of material providers, including coal companies such as ‎‎Console Energy‎‎ and ‎‎the American Coatings Association‎‎, which represent the paint and coatings industry. “When thinking about computer chip manufacturing, no one naturally thinks of a large slab of high-grade aluminum,” said ‎‎a document submitted‎‎ to the Commerce Department late last year by aluminum supplier TST Inc. “Yet the two are connected.‎

‎Large-scale trade unions, including ‎‎the AFL-CIO‎‎ and ‎‎Communication Workers of America‎‎, have lobbied for the implementation of the law. In ‎‎a comment submitted‎‎ to the Commerce Department last November, the International Association of Sheet Metal, Air, Rail and Transportation Workers urged the administration to include “strong labor standards” in the financial support given to companies.‎

‎Late last month, the Department of Commerce said it would prioritize construction projects that use project labor contracts.‎

‎From ‎‎the Los Angeles County Metropolitan Transport Authority‎‎ to the ‎‎Greater Pittsburgh Chamber of Commerce‎‎ and ‎‎port of Portland‎‎, a number of local government agencies and regional development groups lobbied on the implementation of chips and science. Similarly, some national governments ‎‎warned the Department of Commerce‎‎ late last year not to discriminate between U.S. and foreign-owned companies when distributing funds.‎

‎Large telecom companies such as ‎‎Dish Network‎‎ and ‎‎Lumen Technologies‎‎, which have likely been impressed by the law’s support for modern wireless technology, have increased it. So are large healthcare companies like ‎‎Baxter Healthcare‎‎, as well as biotech companies like ‎‎Alumina‎‎ and ‎‎Novozymes‎‎.‎

‎The microchip shortage that began in the early months of the pandemic had dealt a severe blow to car companies. In the previous Congress, he successfully lobbied for chips and science to add $2 billion in subsidies to produce less advanced “legacy” chips often found in cars. And the revelations show they stuck to the bill even after it was passed — ‎‎Ford‎‎, ‎‎General Motors‎‎, ‎‎Toyota‎‎, ‎‎Nissan‎‎, Hyundai and ‎‎Honda‎‎ all ‎‎lobbied‎‎ on the law in the last quarter of 2022.‎

‎Then there are universities. Haier Aid has a huge financial stake in the Chips and Science Act, especially when it comes to sanctioning hundreds of billions of dollars for federal research agencies. From ‎‎the University of California‎‎ to ‎‎MIT‎‎, ‎‎Ohio State University‎‎, ‎‎University of Central Florida‎‎, ‎‎Harvard‎‎, ‎‎State University of New York‎‎ and (many) others, universities across the country lobbied on the implementation of the law.‎

‎Even the crypto industry has joined the process. ‎‎Coinbase‎‎, the company behind one of the largest cryptocurrency exchanges, was among those lobbying for law enforcement late last year. A Coinbase spokesman said the company was most interested in a clause that directs the White House Office of Science and Technology Policy to hire a cryptocurrency expert as well as NSFs to promote research into “distributed ledger technologies.”‎

‎There are also groups whose lobbying on chips and science is against easy explanation. The AIPAC is the most important of these — although ‎‎filings show‎‎ that washington’s pro-Israel group lobbied on the implementation of chips and science late last year, the group did not respond to repeated requests for comment. Shipping company FedEx, which ‎‎had lobbied on chips and science‎‎ in a single timeframe, also did not respond to multiple questions about its interest in the law.‎

‎A spokesman for Amazon-owned online audiobook and podcast service Audible said their ‎‎fourth-quarter lobbying‎‎ on chips and science was done to ensure that the law’s discretionary spending included “funding for space-based quality and financing that high-growth startups interested in joining Newark’s innovation corridor.” can be directed” (Audible is headquartered in Newark, New Jersey).‎

‎Some lobbyists may have also been confused about the provisions of the Chips and Science Act. The law includes $2.5 billion for research into “modern packaging,” which investigates how best to combine microchips into one device for maximum processing power.‎

‎This is different from the type of packaging that is interested in the Flexible Packaging Association, which represents companies that produce ‎‎real‎‎ packages from materials such as paper, plastic or aluminum foil and which ‎‎paid lobbyists to advocate law enforcement‎‎ in late 2022. FPA President and CEO Alison Kane, when asked about the difference, said that although the group’s lobbyists keep an eye on the process, it is not on the chips side.‎

‎It remains to be seen whether the flood of lobbying activity on chips and science ends with payments for a wider range of companies than core microchip and R&D firms. Speaking to reporters late last month about the implementation of the law, Commerce Minister Gina Ramondo described national security as “the primary lens through which we will assess everything.” But Snape and Teitelbaum are still unfazed.‎

‎”Broadly speaking, you don’t need a national security request to be eligible for this funding. Lancicom recently highlighted the conditions associated with the amount — including new child care and labor requirements for companies taking more than $150 million in subsidies — to show that the administration is not as serious about the national security angle as it shows.‎

‎This would be good news for companies like Snap. And as these and other companies are presenting their game, Lancecom said that “it’s inevitable that you’re going to have a connection between lobbying dollars and the final distribution of subsidy funds.”‎

‎”It’s not corruption,” Linkicom said. “It’s just a screaming wheel.”‎

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