The Biden administration is mobilizing behind bipartisan legislation to pump $52 billion into the U.S. semiconductor industry over five years amid a global chip shortage.
Commerce Secretary Gina Raimondo said Monday that she anticipated the funding would generate “$150 billion-plus” in investment in chip production and research, including contributions from state and federal governments and private-sector firms.
“We just need the federal money … to unlock private capital,” she said at a Micron Technology chip factory in Manassas, Va., adding, “it could be seven, could be eight, could be nine, could be 10 new factories in America by the time we’re done.”
The emergency funding proposal, which Senate Majority Leader Chuck Schumer unveiled last week, is part of a $120 billion package of spending on U.S. technology research to better compete with China.
“American manufacturing has suffered rather dramatically from a chip shortage,” Schumer said. “We simply cannot rely on foreign processors for chips. This amendment will make sure that we don’t have to.”
Supporters of the funding note the U.S. now has only a 12% share of semiconductor and microelectronics production, compared with 37% in 1990.
Politico reported last week that the chip shortage “threatens to last through the rest of the year — or longer” but “building new semiconductor plants is a years-long undertaking, so some industries, especially automakers, have implored the U.S. to explore more immediate interventions.”
Last month, Ford Motor warned the chip shortage might slash its second-quarter production by half, costing it about $2.5 billion and about 1.1 million units of lost production in 2021.
Raimondo met with chip giants and top automakers last week at a summit to address the chip shortage.