The Biden administration is sending mixed messages to the U.S.-based semiconductor industry—providing funding to jump-start innovations in the industry while the EPA continues to create new regulations that prohibit or ban the necessary chemicals needed for chip production.

In August 2022, the Biden administration signed the CHIPS and Science Act into law, which provided $280 billion to “boost American semiconductor research, development, and production, ensuring U.S. leadership in the technology that forms the foundation of everything from automobiles to household appliances to defense systems,” according to the White House fact sheet on the Act.

“America invented the semiconductor [chip], but today produces about 10 percent of the world’s supply—and none of the most advanced chips.  Instead, we rely on East Asia for 75 percent of global production,” the fact sheet states.

This reliance creates national security concerns for the United States.

Funding catch

Funding from the CHIPS and Science Act could have strings attached that would hamper industry innovation, reports The Verge.

“By accepting the money, their new fabs [manufacturing plants] could be considered ‘major’ projects subject to federal review under the 1970 National Environmental Policy Act (NEPA),” The Verge article continues. “The law requires federal agencies to assess the potential environmental impact of a major new project.

“… [S]ome CHIPS Act supporters argue that environmental reviews under NEPA could simply mire the process in delays. The environmental review process can take more than four years, on average, to complete. And NEPA happens to be the environmental statute most frequently litigated in the U.S.”

It’s important to remember that the U.S. semiconductor industry was originally very toxic. In Santa Clara County, the location for Silicon Valley, there are more than 23 toxic Superfund sites that are on the EPA’s “National Priorities List” for cleanup, The Verge notes.

While U.S. semiconductor manufacturing plants have discontinued use of historic toxic chemicals such as trichloroethylene (TCE), the industry still produces hazardous waste, uses a lot of energy and water in production, and generates greenhouse gas (GHG) emissions. Any one of these manufacturing processes could trigger a NEPA review, which would slow the innovations sought by the Act’s funding.

Chemical restrictions

The EPA has also proposed regulations prohibiting or altogether banning the production of chemicals such as “methylene chloride, perchloroethylene (PCE), and carbon tetrachloride (CTC) — all vital to the production of those chips,” according to an opinion article by journalist Ray Bolger in the Jacksonville Journal-Courier. “The EPA wants to curtail the chemicals used to make polysilicon, the basic material of computer chips — an obvious obstacle to domestic production. For example, semiconductor manufacturing requires massive amounts of PFA resins, made with chloroform — a co-product of methylene chloride and carbon tetrachloride – for tubing that pipes liquids, slurries and gases around facilities.”

Additionally, the EPA’s increased crackdown on the use of per- and polyfluoroalkyl substances (PFAS) also hampers the semiconductor industry.

“As governments around the world consider legislation or regulation to restrict the use of PFAS in industrial processes or consumer products, the semiconductor industry seeks to play a constructive role in adoption of sound policy,” notes a blog post published by the Semiconductor Industry Association. “In the semiconductor industry, policymakers should proceed carefully in placing restrictions on the uses of fluorinated chemicals. Given the critical role of semiconductors in our economy and national security, it is important to avoid policies that unduly restrict current semiconductor operations or future innovation. At minimum, broad restrictions on PFAS as a class should provide critical use exemptions for the uses of fluorinated chemicals in the semiconductor industry outlined in the papers and provide sufficient time for the industry and its suppliers to identify and qualify potential substitutes.”

The EPA’s proposed regulations don’t prohibit certain industrial manufacturing and processing uses of these chemicals but do propose workplace chemical protection programs with strict exposure limits to better protect workers.

Industry has pushed back against the proposed workplace protection programs.

Honeywell International Inc. encouraged the EPA to:

• “Provide a later deadline for implementation of the Workplace Chemical Protection Program (WCPP);
• Significantly simplify the WCPP requirements as proposed;
• Clarify the phrasing of certain uses that may continue subject to the WCPP;
• Include a provision for the presence of CTC in other formulations, intermediates, and end products when present as a byproduct, or as an impurity; and
• Add a provision, similar to the one proposed for perchloroethylene, for de minimis levels of CTC when present in formulations, intermediates and products.”

“Honeywell considers it imperative EPA implement exemptions for CTC when present as a byproduct, impurity and at de minimis levels. This should be a standard provision across all TSCA (Toxic Substance Control Act) Section 6 rules,” stated the company in comments submitted when the CTC regulations were proposed.

Successful semiconductor manufacturers won’t delay production while U.S. policymakers iron out these policy differences. Building overseas production facilities currently offers fewer regulatory hoops.

For decades, semiconductor manufacturers have demonstrated their commitment to environmental protections, said Charles Wessner, an adjunct professor of science, technology, and international affairs at Georgetown University and a senior advisor at the Centers for Strategic and International Studies, according to the Jacksonville Journal-Courier.

“If we’re going to compete and protect ourselves against hostile powers and create wealth, we need to adjust the balance between environmental protections and supporting new growth,” he said.

“Some want sensible rules, ‘but we need to get past the obstructionists,’ he said. ‘People are deeply attached to their smartphones without acknowledging the toxic materials required to produce them. They want clean energy but don’t want any windmills in their backyards. They don’t want any fields nearby covered with solar panels or transmission lines anywhere in sight. It doesn’t just fall from heaven,’ he added.”