(Bloomberg) — The Biden administration has lured away a Goldman Sachs Group Inc. banker to help build a program that will act as a quasi-investment firm to ramp up US semiconductor production amid a growing feud with China over technology leadership and security.
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Srujan Linga, who’s been at the Wall Street giant for 16 years, will take a role within the Commerce Department to help invest more than $50 billion and make loans as part of the CHIPS for America program. Linga, a 39-year-old managing director at Goldman, will be swapping a position where his compensation approached $5 million in some recent years for the $183,500-a-year government job.
The critical push is aimed at making the US a leader in the production of advanced semiconductors — and takes a direct aim at China’s efforts to assert dominance in the competitive industry. The program is seen by the US government as key to safeguarding US technological and national security.
The push has taken heightened importance as tensions mount between China and Taiwan. The prospect of hostilities poses an increasing threat to the island’s flagship semiconductor industry and to many US companies that depend on chips made abroad. The US National Security Council has projected that a Chinese invasion and the loss of Taiwan’s cutting-edge chip industry could leave a big dent in the global economy.
The Commerce Department has been building a team led by KKR & Co. veteran Todd Fisher as the chief investment officer of the program. The department has also tapped a pair of former Goldman Sachs partners, Kevin Quinn and Brad Koenig, to serve as liaisons with semiconductor firms that will seek a portion of the funding being offered to build plants in the US. Lynelle McKay, who previously worked at Freescale Semiconductor, is also part of the group.
A spokesperson for the Commerce Department confirmed Linga’s addition to the team.
Linga, who has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology, joined Goldman Sachs in 2007. He ran the global structured-credit financing group that had a hand in some novel deals that proved lucrative for the bank.
Hail Mary
His work included roles on deals such as the “hail Mary” move to help telecommunications firm Sprint Corp. raise billions backed by airwaves. More recently, his group helped devise a way for airlines to lean on their frequent-flier miles to raise more than $25 billion in the months after the onset of the Covid-19 pandemic. That was a first-of-its-kind use of the loyalty programs to unlock access to funding for airlines.
Linga had also been tapped by Goldman’s banking heads to help find ways for Elon Musk to take Tesla Inc. private in 2018, a deal that ultimately never happened. His unique dealmaking style also was cited in a book chronicling the troubles at office-rental firm WeWork Inc.
When Linga was pitching a deal to WeWork founder Adam Neumann at his Hamptons home, Neumann said no one can last in an ice bath longer than five minutes. Linga jumped in and quipped he wouldn’t get out until Neumann agreed to partner with Goldman. While he lasted almost 10 minutes in the tub, Goldman didn’t get the deal.
The CHIPS program — put into place by the Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 — allows the Commerce Department to oversee about $50 billion over five years that can be invested in companies to accelerate domestic chip production. It also has provisions to cover direct loans and loan guarantees, with the goal of attracting institutional investors as well to help raise the capital required to achieve the program’s onshoring goals.
“This is the first major industrial strategy in probably 70 years,” US Commerce Secretary Gina Raimondo has said. “And if we don’t succeed, it’ll be the last for the next 70 years.”
–With assistance from Jenny Leonard.
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