President signals intent to sign CHIPS act at Michigan semiconductor maker

President Biden, who is still contagious with COVID, attended a virtual event at Hemlock Semiconductor Operations in Michigan
President signs CHIPS act at Michigan semiconductor maker
Published: Aug. 2, 2022 at 5:23 PM EDT|Updated: Aug. 2, 2022 at 5:52 PM EDT
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correction: A press release from the Michigan Economic Development erroneously stated that the CHIPS act was signed. That has since been updated to reflect that it was discussed by President Biden, and this article has been updated to reflect that change.

LANSING, Mich. (WILX) - The CHIPS act appears to be on track to be signed into law.

The Creating Helpful Incentives for the Production of Semiconductors for America Act, or CHIPS Act, would give $52 billion in incentives to boost domestic chip production. The goal is to help the United States regain its leadership in semiconductor manufacturing.

The act was introduced in response to the chip shortage brought on when demand decreased during the pandemic, then increased sharply coming out of it. There had been an existing shortage but, as with so many other problems, the pandemic worsened the it badly.

Background: Bill to boost semiconductor industry passes key Senate test

Hemlock Semiconductor Operations (HSC), hosted a virtual visit from President Joe Biden on Tuesday. President Biden signaled during the event that the CHIPS and Science Act of 2022 would likely be signed into law. Biden attended virtually, as he recently tested positive for COVID-19.

The CHIPS Act is designed to create jobs in the U.S. supply chain for semiconductors, while also making the U.S. less reliant on the production capabilities of other countries.

“For the sake of our economy and jobs and cost and national security, we have to make these semiconductors in America once again,” President Biden said. “This bill funds the entire semiconductor supply chain, from research and development to key inputs of polysilicon manufactured at Hemlock. The progress we’re making is proof that we’re the United States of America. There’s nothing beyond our capacity when we work together.”

President Biden was joined virtually by U.S. Senators Debbie Stabenow and Gary Peters, and in person at HSC’s manufacturing facility by Michigan Gov. Gretchen Whitmer and Congressman Dan Kildee.

“The bipartisan CHIPS and Science Act will make a once-in-a-century investment in American industry,” said Governor Whitmer. “The ongoing chip crisis is having a stark impact on Michigan.”

The CHIPS act had support from either side of the aisle, including Michigan Republicans Peter Meijer and Fred Upton.

“From their use in microwaves and refrigerators to cell phones, laptops, and cars, semiconductor chips play an integral role in our day-to-day activities, and their shortage has been felt across the nation,” Meijer said. “I have long been vocal in my support for our domestic semiconductor industry and our pressing need to reduce our dependence on other countries to supply them.”

Five days before the virtual event, Upton pointed to the defensive implications of increased domestic production.

“This is also a matter of national security. As we have seen with China’s stockpiling and cutting off supplies to those who call out its bad-faith actions, we cannot continue to rely on China to supply America,” Upton said. “China’s constant threats to Taiwan also means we could face supply disruption in a worst-case scenario regarding China’s territorial ambitions.”

The CHIPS and Science Act authorizes a $52 billion federal investment over five years to boost domestic semiconductor manufacturing. The act provides a 25% tax credit for new or expanded facilities that make semiconductors or related equipment.

CHIPS includes $39 billion in grants for new manufacturing, $11 billion for federal semiconductor research programs and workforce development and $2 billion for Defense Department-related microelectronics activities.

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