Tech Leaders in Washington State Talk About Federal Semiconductor Bill – GeekWire

There is nothing quick, easy or cheap about microchips. The tiny computers that power our smartphones, cars, washing machines and televisions are derived from semiconductor technology, which can take decades to research, design and test. The development process is also expensive.

Lewis Johnson, chief science officer of Seattle-based NLM Photonics, said semiconductor startups face significant challenges in raising capital because of the long tail of time and money that comes with scientific progress.

That’s why many tech leaders say the new Chips and Science Act signed by President Joe Biden last week could be a game-changer for Washington state’s tech and manufacturing communities.

The law authorizes $250 billion in government subsidies for technology and science, with $52 billion earmarked for companies and institutions working with semiconductors.

For the team behind NLM Photonics, many of whom originally joined the University of Washington’s chemistry department, the bill’s passage could mean relying on private investment to develop new semiconductor technologies.

“Many venture capitalists are looking for very quick returns,” Johnson said. “This is where government support for semiconductor research is critical. It’s expensive, it takes a long time, but it can do some amazing things.”

He also pointed out that government investment in semiconductor research and development can reduce the risk of private investors. Some venture capital firms may feel more confident in a government-backed project and decide to contribute matching funds.

The passage of the Chips and Science Act comes as foreign supply chains struggle to meet demand, with many microchips — such as cars — seeing production delays related to the pandemic.

Chris Diorio, founder and CEO of Seattle-based RFID company Impinge, said he welcomes the bill’s passage and hopes it will allow his company to manufacture more chips in the US.

“Due to the current semiconductor shortage, we have not been able to supply enough chips to our customers, whose demand has increased by more than 50 percent in over a year,” Diorio said.

Impinge, which went public in 2016, uses third-party generators to produce, including one in Southwest Washington. Diorio said the Chips and Science Act is the first step toward creating more local startups like that.

“For Impinge, we believe that being able to manufacture more chips in the US will connect trillions of everyday things to drive efficiency, reduce waste, enable a circular economy and ultimately improve people’s lives,” he said.

Washington Senator Maria Cantwell was one of the main supporters of the act. Her office predicts significant investments in research and entrepreneurship related to artificial intelligence, semiconductors, quantum information, robotics and biotech, as well as many other areas of technology.

“This investment will help America stay competitive, create a diverse technology ecosystem, grow the jobs of tomorrow and help solve some of our most pressing problems, from climate change to cybersecurity,” Cantwell said following the legislation’s passage.

According to Cantwell’s office, research and commercial work from the University of Washington was largely the basis for the goals of the Chips and Science Act. And with significant research at the university related to artificial intelligence and other key areas, the UW is expected to receive an influx of government grants from the initiative in the coming years.

Cantwell said the move aims to replicate the kind of growth Seattle’s tech region has seen in other areas of the country over the past decade.

“Seattle’s development as a tech hub served as a model for this legislation,” Cantwell said. “As other states learn from us, America will be an innovation machine firing on all cylinders — and key domestic institutions like the University of Washington will be better funded.”

But the law has its critics. Alan Sykes, a professor at Stanford University, was against the move. At a Stanford Q&A earlier this month, Sykes pointed out that most of the bill’s grants are unrelated to semiconductor research and funding. On the other hand, he thinks the free market should make supply and demand independent of government involvement – which, he says, can shift subsidies to certain interest groups.

“Government efforts to pick winners and losers can easily dissipate resources and become too parochial in practice,” Sykes said.

The law contains funding for both short-term and long-term investments in science and technology. Investments in workforce development take years to materialize and measure results, says Michael Schuttler, CEO of the Washington Technology Industry Association.

“They’re trying to move some big rocks up a big hill,” he said.

But the act also allocated $10 billion to create regional technology centers, and Schuttler expects to see results there quickly. He said the Commerce Department and the National Science Foundation distribute funds and have experience with this type of work.

“They’re also very stupid agencies, and they’re very good at deploying federal dollars,” Schuttler said. “It’s reasonable to think that in the next 12-18 months we’ll start to see some activity in the technology hubs of the region.”