Mini-exodus of Trump officials from Commerce to lobby on semiconductors

Mini-exodus of Trump officials from Commerce to lobby on semiconductors
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Three top Commerce Department officials have left the Trump administration in the past month to take on lobbying roles at the D.C. offices of major semiconductor companies.

The moves come at a time when U.S. companies and Congress are increasing efforts to counter China's expanding strength in the global market for chips. The federal government is also looking to increase domestic design and production of chips used in smartphones, medical devices and computers amid rising tensions with China and supply-chain concerns among lawmakers.

“Washington is increasingly focused on issues impacting the semiconductor sector, so our industry has bulked up its presence to ensure policymakers understand that U.S. leadership in semiconductors is essential to America’s global technology leadership, national security, economic strength, and job creation,” John Neuffer, head of the Semiconductor Industry Association (SIA), told The Hill.


One of the Commerce departures is Patrick Wilson, former business liaison director at the agency who joined MediaTek as vice president of government affairs on Monday.

Wilson opened SIA’s first office in D.C. and is considered a pioneer in the semiconductor industry. His new Taiwan-based employer powers more than 1.5 billion new devices a year, from smartphones and TVs to routers and gaming controllers. 

“Patrick is a seasoned veteran in the public policy area and has a deep understanding of the semiconductor landscape. He will help advise MediaTek and add our voice to the dialogue about important issues that will guide and grow the semiconductor industry globally,” MediaTek general counsel David Su said in a statement.

Another newly minted lobbyist is John Cooney, former acting deputy assistant secretary at the International Trade Administration. He is now director of government relations at SkyWater Technology, which focuses on manufacturing national security chips for the Defense Department.

“My primary goal in my new position is to help the company grow through sales and take advantage of its market-leading position as a wholly U.S.-owned and U.S.-operated Foundry, a position that is unique within the industry at a time when American companies’ experiences with other countries are driving discussions about how to ensure secure and trusted supply chains for end products,” said Cooney, who worked at Commerce for three years.

Rounding out the mini-exodus is Rich Ashooh, former assistant secretary for the Bureau of Industry and Security who is now vice president of global government affairs for semiconductor supplier Lam Research.


Ashooh worked in the administration for three years and Lam Research, in a statement about his hiring, said “his track record of solving complex problems and engaging diverse stakeholders makes him an ideal partner to advocate.”

Their departures come as the coronavirus accelerates demand for semiconductors, with more people working from home, telehealth taking off and more classes moving online.

“Over the past few months, people around the world have experimented with new ways of working, studying, and communicating through videoconferencing and other technologies. Such trends could have a lasting impact on semiconductor demand and open new possibilities for existing products and services,” McKinsey published in a June report.

The report noted that semiconductors will be in high demand for contactless solutions, automated delivery like drones and assisted-living sector devices.

As that demand grows, and competition increases with China, more U.S. companies want to make sure Congress is in their corner.

“The U.S. is in a technology competition with China and semiconductors are at the very tip of the spear. I think companies are recognizing policies are being made in Washington that are having an increasing impact on their business, so they need to be at the table,” Neuffer said, adding that China is investing $100 billion in its semiconductor industry.

When reached for comment on the string of Commerce departures, Secretary Wilbur RossWilbur Louis RossHouse panel, Commerce Department reach agreement on census documents China sanctions Wilbur Ross, others after US warns of doing business in Hong Kong DOJ won't prosecute Wilbur Ross after watchdog found he gave false testimony MORE stressed his agency is committed to keeping the U.S. competitive in the semiconductor industry.

“The Trump Administration is committed to ensuring the United States has a secure, vibrant, and internationally competitive high-tech ecosystem, supported by domestic, advanced microchip production. Previous Administrations let our global share of semiconductor fabrication volume drop from 24 to 12 percent,” he told The Hill.

About 12 percent of the global semiconductor manufacturing is done in the U.S., according to SIA. In 1990, that figure was 37 percent.

“We must reverse this trend so that our high-tech industries do not depend on foreign supply chains. We will continue to engage with Congress to secure the future of the industry on American soil and welcome the bipartisan support for our collective efforts to date,” Ross said.

But even the top U.S. companies are having a hard time getting ahead in the field.

Intel Corp. announced this month that its next-generation chips would be delayed by half a year.

“That’s a huge wake-up call. No matter who is president starting in January, this next administration is going to have to be focused on semiconductors. You can’t just ignore it and all of these companies, and they know that,” Rob Atkinson, president of the Information Technology and Innovation Foundation, told The Hill.

Atkinson said the last time Congress focused on semiconductors was in the 1980s amid concerns Japan was making inroads.

“Since then, it’s an industry that was largely ignored or taken for granted in Washington,” he said.

Sens. John CornynJohn CornynDemocrats make case to Senate parliamentarian for 8 million green cards Democrats to make pitch Friday for pathway to citizenship in spending bill Without major changes, more Americans could be victims of online crime MORE (R-Texas) and Mark WarnerMark Robert WarnerAdvocates call on top Democrats for 0B in housing investments Democrats draw red lines in spending fight Manchin puts foot down on key climate provision in spending bill MORE (D-Va.), in an effort to blunt U.S. dependence on foreign semiconductor manufacturers, included an amendment in the National Defense Authorization Act last week to help bring chip manufacturing jobs back to the U.S.

“Congress has a strategic opportunity to invest in domestic chip manufacturing incentives and research initiatives, both of which will drive innovation in our industry and strengthen America’s economy, national security, and supply chains,” Neuffer said.

U.S. companies aren’t exactly banding together, though. Apple announced last month it would no longer work with Intel as its semiconductor supplier for computers and instead use the Taiwan Semiconductor Manufacturing Company (TSMC). Leading TSMC’s office in Washington is Peter Cleveland, who was poached from Intel last year. Before that, he was chief of staff to Sen. Dianne FeinsteinDianne Emiel FeinsteinWarren, Daines introduce bill honoring 13 killed in Kabul attack Democrat rips Justice for not appearing at US gymnastics hearing Former California senator prods Feinstein to consider retirement MORE (D-Calif.).


One challenge facing the former Commerce officials is how their companies can keep pace with China's manufacturing and production of chips.

The Commerce Department announced a rule in May requiring companies selling chips to Huawei that are made abroad with any U.S. parts or technologies to obtain a license, blocking Huawei from access to a large share of chip production. 

“They were laying down the gauntlet with that one, no question about that,” Atkinson said. “With this whole talk after COVID of reshoring and supply chain, that is another big issue that industry knows they will have to face — not just medical equipment, but semiconductors. That’s another big reason to beef up their presence in D.C.”

Semiconductor manufacturing is growing in the U.S., just not at the same speed as China. A day before the Commerce rule was announced in May, TSMC announced plans to invest about $12 billion on a new production facility in Arizona in May.

“If people are worried about Huawei and 5G, losing chips is an order of magnitude larger and a crisis for the country than was losing the U.S. telecom equipment industry,” Atkinson said.

Ross celebrated TSMC’s move at the time and noted that the semiconductor industry is critical to U.S. economic growth.


It’s also critical to U.S. national security.

“Semiconductors are at the heart of America’s economic strength, national security, and global tech leadership, so you’re seeing an increased push in Washington to advance policies that keep our industry strong,” Neuffer said. 

Atkinson said that the next big advantage for the U.S. in military affairs will be built on information technology, another area where domestic semiconductor manufacturing will be essential.

“We can’t be reliant on Chinese chips for that. You now add a national security component into this debate. We’re definitely on the defense with China,” Atkinson said.