This Is What President Biden's CHIPS Office Actually Did

SPEAKER_2 (0:02)

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Joe Weisenthal (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:23)

And I'm Tracy Alloway.

Joe Weisenthal (0:24)

Tracy, I just wrote about this in our newsletter like five minutes ago, but it drives me nuts how in all of the talk about reindustrialization of America, everyone had just completely memory hold like 2022 and 2023

Tracy Alloway (0:38)

Well, this is the amazing thing, right? We did have a big investment program actually announced under the Biden administration, like huge amounts of money, billions of dollars, and no one seems to be talking about it that much, or at least a very important segment seems to be ignoring it, and that is the Trump administration. Trump, I think he said before that he thought it was a horrible policy. I suspect the reason he thinks it's horrible is because it was a Biden thing, but it is also amazing that like even this, even making more semiconductors in the US ended up being politicized and a sort of culture war issue.

Joe Weisenthal (1:21)

It's just crazy to me. It's totally insane to me of all these like influencers and LARPers waiting to bring back physical manufacturing and national security, etc. As if this hasn't been a dominant thing in US discourse for years, as if there weren't literally battery and chip factories being announced almost every day throughout 2022 and 2023 all across the US.,

it was not just a program, it was like an actual like breaking ground and new things were going up and dollars spent by the private sector partially to get public subsidies, etc. You could certainly say that it was like badly designed or that it was wrong or there were too many rules, whatever, like all that, you know, that's all of this is fair play. But the idea that suddenly this is just some like new impulse and not like something that's real existing re-industrialization that's going on, I find it infuriating or at the very least very annoying.

Tracy Alloway (2:17)

Shall we fix that, Joe?

Joe Weisenthal (2:18)

Let's fix it. Well, we should talk about what actually happened, right? Because it does seem like either literally or de facto or de jure or whatever, the plug is being pulled on a lot of these different programs and now there's talk about industrialization, but the hope is that tariffs themselves spur all of this domestic investment in physical things for people to do assembly line jobs, et cetera. But we should learn a little bit more.

Tracy Alloway (2:44)

We should talk about what the hopes actually are as well, because yes, boost manufacturing in the US., create new jobs, spur some private investment, a sort of public-private idea, but there are a lot of different threads that you can pull here in terms of the actual goals.

Joe Weisenthal (3:01)

Well, we should learn a little bit more about what the CHIPS Program actually was. And it does still exist, but I'm not really sure if it seems like it's more of a husk than it was. We're gonna be speaking with someone we know very well, someone we've known on the internet a long time, someone who even came on Odd Lots once several years ago, who actually worked in the CHIPS Program Office. We were speaking with Hassan Khan. He was the Director of Economic Security at the CHIPS Program Office. I believe he's officially left the job, so he could talk now about what he saw inside. Hassan, thank you so much for coming back on Odd Lots.

Hassan Khan (3:38)

Joe, Tracy, it's always a pleasure. Your intro there, I feel very similarly. I really do feel like we forgot about what was accomplished in, honestly, less than two years, so excited to talk about it.

Joe Weisenthal (3:50)

What do you tell us, what did you do as the Director of Economic Security at the CHIPS Program Office? What was that job?

Hassan Khan (3:57)

So, if you look at why we passed the CHIPS and Science Act, Congress and the President came together and said, our reliance on offshore manufacturing for semiconductors presents both an economic and national security threat. And we saw that play out in real time during the pandemic when we couldn't make cars, we couldn't make a whole host of goods. Prices went up, that posed an economic security threat because people were losing their jobs. Obviously, there's a national security angle as well, because we were reliant on overseas factories for CHIPS that go into military equipment. And as the Director of Economic Security, my role was for, it was sort of twofold. First, helping sort of set the strategy. What was our vision for what we wanted to accomplish with the CHIPS Program Office? So before I joined, we published a Vision for Success paper in February of 2023 I'm actually quite astonished. I think very few people who talk about CHIPS actually read that paper. And I still think it's worth reading because it laid out a roadmap for what we wanted to do within the different categories. And then the second job that I had was helping our teams understand the value of each proposed project to US economic security. So why would the factory that X company is proposing improve our economic security? And obviously, there are different ways in which you can do that, whether that's advancing technological capabilities, improving supply chain resilience, plugging various gaps in the supply chain, etc., etc. And that's why we did sort of a deal-by-deal analysis on those metrics. But it was really that two-fold going not just strategically across the portfolio, but on a deal-by-deal basis.