Lawfare Daily: Mike Schmidt Talks CHIPS and U.S. Industrial Policy
Summary
Mike Schmidt, former director of the CHIPS program, discusses how the legislation successfully reshaped global semiconductor supply chains by leveraging grants and tax credits to attract major manufacturers to the US. He analyzes the effectiveness of different industrial policy tools, arguing for a broad toolkit while cautioning against using equity stakes for mature firms. Schmidt emphasizes the importance of vertical resilience, allied cooperation, and strong congressional mandates to sustain long-term industrial strategy.
Topics discussed
Intro: Lexus Takumi craftsmanship and ShipStation ad
Ground News ad: Breaking media bubbles
Intro: Mike Schmidt on Chips Act and industrial policy
Semiconductor industry context before the Chips Act
AI demand and US as a premier chip destination
Chips Act grants vs. loans and project risks
ITC credits and bottom-up project economics analysis
Loans vs. grants: Why capital access wasn't the issue
Equity toolkit and government profit objectives
Profit vs. national security in industrial policy
Demand side: Negotiating with chip customers like Apple
Diversifying suppliers for resilience and competition
Export controls as industrial policy and EU tech access
Coercive power vs. long-term institutional norms
Institutional design: Congress setting strategic objectives
Ads: Bill.com, Leesa mattresses, Range Rover, Verizon
Congressional mandates and selecting strategic sectors
Criteria for critical industries: Defense, health, capital
Vertical resilience: Supply chain dependencies and packaging
Horizontal resilience and onshoring vs. friendshoring
Global manufacturing distribution and market decisions
Bureaucratic hurdles: Procurement and hiring authorities
Environmental permits and legal indemnity negotiations
Advice for careers in government industrial policy
Outro and Ground News ad repeat
Granger ad
Listen ad-free on Castria