Detroit — U.S. Sen. Gary Peters on Monday took a Senate subcommittee hearing about the automotive sector to the Motor City to tout legislation that would support domestic semiconductor chip manufacturing.
The Bloomfield Township Democrat, chairman of a Senate subcommittee on surface transportation, maritime, freight and ports, convened a field hearing on automotive innovation and semiconductor chips at the Detroit Regional Chamber's downtown headquarters.
There, Peters called for passage of legislation that includes $52 billion in chip funding, with $2 billion set aside for legacy chips used in autos — a provision written by Peters and Sen. Debbie Stabenow, a Lansing Democrat.
Peters and witnesses who testified during the hearing emphasized the growing importance of semiconductor chips — an ongoing global shortage of which has hampered auto production for more than a year — in modern cars, trucks and SUVs. Today's vehicles feature thousands of chips that support functions ranging from braking to power steering to heated seats. And electric, digitally-connected and under-development autonomous vehicles require an even greater number of the components.
Peters cast domestic chip production as crucial not only to combating climate change, but to U.S. competitiveness and national security. Today, the U.S. produces only about 12% of the world's chip supplies, down from roughly 37% decades ago. Most of the world's semiconductor production is based in Asia.
“In terms of electrification, novel semiconductor technologies promise to reduce charging times, extend range and enhance performance for electric vehicles, among other benefits," he said. "And not only will electric vehicles help save our planet by combating climate change, they will also reduce our dependence on foreign energy sources and protect Americans from unpredictable gas prices."
To prepare for a future defined by electric and autonomous vehicles, he argued, the U.S. must shore up its supply chains by bolstering domestic production of chips and other vital goods — an imperative he said has been brought into focus by the supply-chain disruptions the U.S. has experienced during the coronavirus pandemic.
"Our supply chains are efficient, but they are not resilient," said Peters. "Much of this is due to the fact that we're too reliant on overseas production."
Steve Dawes, director of United Auto Workers' Region 1D, in his testimony advocating for passage of the legislation explained the vital function that semiconductor chips serve in vehicle assembly.
"Electronics control your brakes, steering, your fuel management, your radio, your lights, your cameras, your heated seats, your heated steering wheel, your speedometer, to number just a few," he said. "Many of these functions were historically operated with cables, shafts, mechanical methods. Now each of these functions are controlled by a dedicated module. Each of these modules contains chips.”
Meanwhile, Garrick Francis, vice president of federal affairs for the Alliance for Automotive Innovation, which represents automakers in the U.S., echoed support for the legislation, casting it in terms of U.S. competitiveness as the automotive industry undergoes one of its most significant transformations in history.
"Government policies, investments and programs must be modernized and transformed to reflect changes in the global marketplace and gaps in the supply chain," he said. "Expanding and securing critical supply chains while developing new ones is a key factor in whether the U.S. will remain a leader in automotive innovation."
Jay Rathert, senior director of strategic partnerships for KLA Corp., which supplies the semiconductor industry and recently opened a second headquarters in Ann Arbor, testified that "a talented and creative workforce, a fair and hospitable business environment, and an ongoing commitment to an investment in R&D" are primary factors guiding the semiconductor industry.
"KLA’s business is worldwide, but we support efforts to increase competition in the chip industry and to restore advanced manufacturing and foundry production in America," Rathert said in advocating for passage of the CHIPS Act.
Glenn Stevens, executive director of MICHAuto, testified that investment in domestic chip production would support the creation not only of manufacturing jobs, but high-tech jobs — a prospect that will require a "sophisticated talent strategy" in Michigan and across the country.
“These bipartisan pieces of legislation are our chance to secure America and Michigan’s position as a dominant leader in automotive and mobility manufacturing and innovation for the future," he said. "We shouldn’t pass this opportunity up.”
Peters noted that both the Senate and House now have passed separate bills that would fund the CHIPS Act and said he hopes to see the Senate version approved "within the next few days," he told The Detroit News, at which point the process to meld the Senate and House versions would begin.
“I think we’ll find a path forward," he said. "Folks understand how important it is to get this passed, so I’m confident that we’re going to get to the final product. And I’m very confident we’re going to be focused on the legacy chips that are absolutely essential for the auto industry, that we’re going to be able to get it done soon.”
Vermont Sen. Bernie Sanders, an independent, recently called the $52 billion in funding represents "corporate welfare to the profitable micro-chip industry."
But Peters told The News Monday that he sees it as a national security issue: “We know this a global economy and that other countries invest in this production, because they believe that it is essential for their economic security. We have to do the same thing in the United States."