Senators press Commerce Department to boost transparency about CHIPS Act contracts 

A group of senators are urging the Commerce Department to be more transparent regarding the terms of agreements made under the CHIPS and Science Act, arguing the agency must ensure the U.S. semiconductor industry is “safe and sustainable.”

In a letter Friday to Commerce Secretary Gina Raimondo, Sens. Ed Markey (D-Mass.), Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) expressed the need for transparency following the Biden administration’s recent announcement of the first commercial agreement on a CHIPS and Science Act award.  

“The Department of Commerce should use its role in the grant-making process to ensure that the U.S. semiconductor industry is safe and sustainable, creates high-quality jobs, and does not simply enrich shareholders and executives through stock buybacks,” the letter stated.  

To do so, the lawmakers contended the Commerce Department needs to be more transparent about the CHIPS contracts’ terms, as well as reporting on the progress of companies on these commitments.

The CHIPS and Science Act was passed in August 2022 and set aside nearly $53 billion to increase domestic chip production, with $39 billion set aside for manufacturing incentives. Officials have said the bill is crucial to making the U.S. less reliant on foreign supply chains.  

The lawmakers’ letter comes just weeks after the Commerce Department’s finalization of a $123 million grant for Polar Semiconductor, which will allow the manufacturer to expand its plant in Minnesota. The grant is projected to nearly double the company’s production capacity of sensor and power chips, according to the agency.  

The award is the first in the CHIPS subsidy program to be finalized by the Commerce Department.  

The lawmakers criticized the department for not releasing “important terms of the agreement,” including issues related to job quality, wages, worker health and safety and stock buybacks. The lawmakers also claimed the agency did not reveal how much it will hold grant recipients accountable if they do not uphold the terms of the contract.

The Biden administration has allocated more than $31 billion in CHIPS funding so far to companies including Samsung, Intel and Taiwan Semiconductor Manufacturing Company to develop their semiconductor manufacturing in the United States.  

President Biden has repeatedly touted the importance of the CHIPS and Science Act, pointing to the prevalence of microchips that are used in technology from cars to phones to home appliances and more.  

Markey, Warren, Sanders and Sen. Ben Ray Luján (D-N.M.) penned a similar letter to Raimondo in early August urging the Commerce Department to make sure CHIPS recipients maintain high standards for the health and safety of workers, the community and environment. The lawmakers at the time cited a risk of exposure to chemicals and greenhouse gas emissions stemming from semiconductor manufacturing.