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Witnesses warn NEPA and permitting delays could undercut CHIPS‑era semiconductor construction
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Summary
Members of the Joint Economic Committee heard that while the CHIPS Act provides strong incentives for on‑shore semiconductor fabrication, permitting under older federal rules such as NEPA is adding years to construction timetables and raising project costs.
Federal incentives under the CHIPS and Science Act have spurred semiconductor factory plans across the United States, witnesses told the Joint Economic Committee, but regulatory permitting can add years and billions in extra project costs, threatening timely completion.
Why it matters: The CHIPS Act directs large public incentives to semiconductor fabrication. Witnesses said those incentives will not yield durable industrial capacity if multi‑year environmental and permitting reviews delay construction and increase project costs.
Sujesh Shivakumar of CSIS said federal environmental review under the National Environmental Policy Act “can add 4 to 5 years” to the build‑out of fabs now being planned. He said the CHIPS Act’s incentives are concentrated on fabrication: “Roughly 95% of the CHIPS Act’s incentive supports semiconductor fabrication,” and every additional year of delay increases project costs materially — he said a single year of delay can add roughly $1 billion to a fab’s cost.
Witnesses urged streamlining permitting while preserving environmental protections, calling for modernized processes that provide clarity and predictable timelines for projects whose technology cadence moves much faster than the 1970s‑era statutes they often confront.
Members and witnesses also discussed coordination across federal, state and local permitting processes, noting that companies already plan for multiple layers of review and that overlapping requirements can duplicate delay. Shivakumar said the scale and urgency of current investments create a pressing need to adapt regulatory procedures to enable predictable timelines without abandoning environmental safeguards.
Ending: Witnesses stopped short of proposing a single legislative fix but recommended targeted statutory and administrative measures to speed environmental review for projects tied to strategic manufacturing investments while keeping environmental standards in place.
