A portion of the U.S. Senate’s proposed emergency funding proposal may go towards the construction of up to ten new domestic semiconductor chip plants, Reuters reports.
U.S. Senate Democrat leader Chuck Schumer put forth an emergency funding proposal last week that would set aside $52 billion to support the American semiconductor manufacturing industry. This week, U.S. Commerce Secretary Gina Raimondo said the federal funding could help drive hundreds of millions of dollars in private investment for the U.S. chip-making sector – a change that could result in several new chip plants being built on American soil.
“We just need the federal money to unlock private capital,” Raimondo said, as quoted by Reuters. “It could be seven, could be eight, could be nine, could be 10 new factories in America by the time we’re done.”
Schumer’s proposed bipartisan bill would sideline $39 billion for production and R&D incentives, along with another $10.5 billion for federally-funded programs and institutions like the National Semiconductor Technology Center and National Packaging Manufacturing Program.
The chip shortage has hit the Detroit Big Three hard, cutting around 325,000 vehicles from Ford’s production schedule so far and 278,000 from GM’s. Ford has said the chip shortage could trim its second-quarter earnings by about half and may continue to affect its production output throughout 2021 and into early 2022.
“American manufacturing has suffered rather dramatically from a chip shortage,” Schumer said when introducing the $52 billion bill last week. “We simply cannot rely on foreign processors for chips. This amendment will make sure that we don’t have to.”
In 1990, the U.S. had a 37 percent share of global semicoductor manufacturing – a figure that has now dwindled to just 12 percent. The majority of semiconductor chips are currently made in Asian countries, including China, Taiwan, Korea and Japan.
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Comments
Great investment, the US should never again get out of electronic manufacturing.
ins’t $50bln about the same amount trump cut in welfare checks to farmers in one year?
This is called Irony. They always wait until the damn is broke and the valley has been washed away to realize there is a problem.
Government always reacts, never acts. The CDC budget was cut by the Obama administration, how’d that work out several trillion dollars later??
I am torn every time I hear of taxpayer money being spent to prop up industry.
I’m not torn at all. I oppose it like any other bailout.
It’s not a bailout, and it isn’t being used to prop up an industry exactly. It’s being used to incentivize private investments to bolster the industry. Which in theory increases tax revenue and jobs.
The difference between prop up and incentive?
that is how most people feel until it is their job on the line.
Automakers expect suppliers to have a one sided for their benefit relationship….meanwhile, the executive at the semiconductor supplier calls up microsoft, amazon, Apple etc when the 3 US carmaker cancelled orders and the tech companies were glad to take the shipments. Then the big 3 car companies who all together have tiny volume were surprised that they had to get in line. They canceled their backlog….now they wait.
Intel’s Andy Gore said the regulations the US government put on the chip manufactures in the US cost each facility a BILLION more than other countries, thus cheaper and quicker to build overseas.
Reagan started globalization, fueled Wallstreet greed. Its 40 years old and its hard to just add factories in a country where Wallstreet and shareholder ignorance fuels stock prices for Healthcare to prevent US based mfg, and the unions kill competitive entities.
So we can add the factories………but our greed for our 401k values, and lobbyists pushing big pharma will keep the factories from their intended goal and will not be competitive. Plus…TSMC never had workers complain about wearing masks, the entire country has common values…we dont.
So how long will it be till our new capacity helps the auto industry
So 2 billion for the new plants and 50 billion for pork liberal programs that have nothing to do with chip production. Thanks Chuck!
pesos. Line the US car companies cancelled their backlog of semiconductors, had every opportunity to leave some product on order and have reserve safety stock inventory but based on their egos they assumed they could force their vendors into giving them product whenever they want……meanwhile, their cancelled order product was shipped to other companies in other vertical markets. This happens all the time with US car companies but normally they have a big pipeline of dealer inventory to buffer highs and lows….
Kommunist Chip Company
Will incentives include dropping some of the onerous EPA regulations placed on chip makers in the US by our government? Typical of the federal government, cause a problem in the private sector, then try to cure it by throwing money at it. I hope the industry can be Phoenix and rise again. Key will be controlling costs so they are competitive world wide.
Just eliminate lobbying..it wasn’t till the 70s that it really became legal to lobby. I feel that maybe if we could shift time back to the 50s on taxes and companies invested in the company and workers we would be better off.
Fat chance, Kommunism has won the battle.