US Department of Commerce Head Announces Chip Funding Could Result In Ten New Plants
At an event outside a US Micron Technology Inc chip factory on Monday, Commerce Secretary Gina Raimondo told an audience that a proposed bill on Capitol Hill for $52 billion could bolster domestic semiconductor manufacturing by funding seven to 10 new US factories, according to Reuters.
Raimondo told the audience in a tented event outside of Micron’s Manassas, Virginia, chip factory that she expects the $52 billion proposal to enhance US competitiveness with China would generate “$150 billion-plus” in investment for chip manufacturing and research from state and federal governments and private-sector firms.
Semiconductors are the building blocks of our future economy and a key part of our global competitiveness. pic.twitter.com/xoKvXHQivv
— Secretary Gina Raimondo (@SecRaimondo) May 25, 2021
“We just need the federal money … to unlock private capital,” she said, adding, “it could be seven, could be eight, could be nine, could be 10 new factories in America by the time we’re done.”
Raimondo said states would compete for federal funding for new chip factories.
Virginia Senator Mark Warner also spoke at the event, who reiterated federal funding could bolster new domestic semiconductor plants to “seven to 10.”
Today we were honored to welcome @SecRaimondo, Sens. @JohnCornyn and @MarkWarner, and Mayor @MDavisYounger to our Manassas facility. We appreciate their continued leadership and support for Micron and the U.S. semiconductor industry. pic.twitter.com/9QywE1Z7px
— Micron Technology (@MicronTech) May 25, 2021
Warner admits the plan isn’t going to “solve the domestic semiconductor shortage overnight.” He said, “it will take years for the Commerce Department to make these investments.”
Last Tuesday, Senate Majority Leader Chuck Schumer called the plan “a historical and immediate infusion of federal money” to restore chip-making in the US critical to the military, automobiles, farm equipment, and electronics.
“This legislation will allow the United States to out-compete countries like China in critical technologies like semiconductors, create good-paying American jobs and help improve our country’s economic and national security,” Schumer said.
This all comes as chip shortages enter the “danger zone” as semiconductor lead times reached new highs, indicating that shortages of these critical components intensify.
Chip shortages could result in global automakers losing upwards of $110 billion in sales this year. Ford Motor Co., General Motors Co., and other vehicle makers are idling plants as critical tiny chips cause supply chain bottlenecks.
Industry insiders are warning the shortage may last for years.
Intel’s CEO Pat Gelsinger has been the latest in a chorus of industry voices to warn about the ongoing semiconductor shortage that will last for a “couple of years.”
Gelsinger said US dominance in the chip industry had dropped so much that only 12% of the world’s semiconductor manufacturing is made in the US, down from 37% about 25 years ago.
“And anybody who looks at supply chain says, ‘That’s a problem.’ This is a big, critical industry and we want more of it on American soil: the jobs that we want in America, the control of our long-term technology future,” he said.
America squandered its share of semiconductor production over the last three decades by offshoring the manufacturing sector to Asia, which has resulted in unprecedented bottlenecks in supply chains that may last for years.