Tech companies are stepping up the pressure on lawmakers to pass the CHIPS for America Act
America’s tech manufacturing industries are frustrated as the CHIPS for America Act, which would strengthen the U.S. semiconductor industry act, has not been signed into law even after a year.
The Senate passed the bipartisan U.S. Innovation and Competition Act last summer to create incentives to produce semiconductors for America by opening up $52 billion in funding to bolster the chip manufacturing and help address the pandemic-induced global chip shortage.
The semiconductors (chips) are the basic building blocks of modern computation. Chips power almost every electronic device from mobile phones, cars, military weapons, smart gadgets, and medical devices.
Tech companies relying on funding to build new factories
Tech companies are stepping up the pressure on lawmakers to pass the legislation. “Time is of the essence,” said Intel CEO Pat Gelsinger during a March hearing in Washington, D.C. American businesses in every sector across the economy are facing a semiconductor shortage, he added, “and the only way to alleviate the current supply-demand imbalance long term is to increase manufacturing capacity by funding and implementing the CHIPS Act.”
GlobalFoundries, which is exploring expanding a manufacturing site in Malta, New York, told the Washington Post that the funding would affect the rate and pace it invests in increasing U.S. manufacturing capacity. “The CHIPS Act makes the U.S. semiconductor industry more competitive globally,” said Steven Grasso, GlobalFoundries’ managing director of global government affairs.
More than 100 CEOs urge U.S. Congress to pass chip bill
Last week, more than 100 CEOs signed a letter to Congress, addressing the timeliness of passing the bill. The Semiconductor Industry Association (SIA), a consortium of chip and technology providers, issued a letter this week co-signed by CEOs of Google, Intel, Amazon and others, which said: “The competitiveness legislation pending in Congress is critical to the U.S. economy, national security and supply chain resilience. The bill includes important measures to invest in research and technology leadership, workforce development, and domestic manufacturing and strengthened supply chains, including investments in key areas such as semiconductors vital to our entire economy.”
“The rest of the world is not waiting for the U.S. to act,” SIA wrote. “Our global competitors are investing in their industry, their workers and their economies, and it is imperative that Congress act to enhance U.S. competitiveness. We call on Congress to act promptly to achieve a bipartisan agreement that can be passed and signed into law. Now is the time for Congress to complete its work on this important bill.”
Leading Auto CEOs ask Senate to act
More than 20 CEOs spanning automotive manufacturers, suppliers and innovators, also sent a letter to Congress, urging quick passage of the bill which includes funds to increase domestic capacity of semiconductor supply chains ‘critical’ to the future of the auto industry in the U.S.
The CEOs wrote: “If the U.S. fails to meet this moment and keep pace with international efforts to attract investments in the semiconductor supply chain, it will undermine the competitiveness of all sectors of the economy – including automotive – that rely on semiconductors for both current and future products and services.” The letter was signed by Honda, BMW, Ford, General Motors, Hyundai, KIA America; Mercedes Benz, Toyota, Volkswagen, Volvo and others.
Intel delays expansion
Intel is postponing the groundbreaking ceremony for its planned chip-making facilities in Ohio since the U.S. government has not yet provided required funding.
Intel told US lawmakers and government officials that it’s delaying its ceremony “due in part to uncertainty around” the CHIPS Act. “Unfortunately, CHIPS Act funding has moved more slowly than we expected and we still don’t know when it will get done,” said Intel spokesperson William Moss.
“It is time for Congress to act so we can move forward at the speed and scale we have long envisioned for Ohio and our other projects to help restore U.S. semiconductor manufacturing leadership and build a more resilient semiconductor supply chain” Moss added.
