Peters Bill Ensures Eligibility for Federal Incentives to Strengthen Semiconductor Supply Chain
WASHINGTON, DC – U.S. Senator Gary Peters (MI) announced bipartisan legislation to bolster American semiconductor production and supply chains. The Investing in Domestic Semiconductor Manufacturing Act, which was introduced with U.S. Senators Rob Portman (R-OH), Marsha Blackburn (R-TN), and Mark Kelly (D-AZ), would ensure that federal incentives to boost domestic semiconductor manufacturing include U.S. suppliers that produce the materials and manufacturing equipment that enable semiconductor manufacturing – strengthening the supply chain for semiconductors and bolstering Michigan manufacturers. The introduction of this bill comes amid the global shortage of semiconductor technologies that has caused major disruptions for a wide range of industries including manufacturers in Michigan.
“The semiconductor chip shortage has hurt our economy and cost jobs – and highlights why we must shore up our supply chains and invest in domestic manufacturing,” said Senator Peters. “By incentivizing those who produce essential materials and equipment, we can create more opportunity for manufacturers in Michigan and across the country – as well as strengthen the supply chain that supports domestic semiconductor manufacturing. There’s no doubt semiconductors are a critical technology for the future, and I’ll keep working to advance it right here at home.”
“The current semiconductor shortage is having wide-ranging harmful effects on our economy and national security. The CHIPS Act helps address this crisis by giving our domestic supply chain a shot in the arm. To have a truly resilient domestic semiconductor industry, we need to support upstream manufacturers as well,” said Senator Portman. “This legislation will clarify eligibility for the semiconductor Financial Assistance Program at the Department of Commerce, ensuring that semiconductor equipment and materials manufacturers have a seat at the table to help reshore manufacturing and boost domestic production.”
“The recent global chip shortage put American medical equipment, computer, and car supply chains on hold,” said Senator Blackburn. “The Investing in Domestic Semiconductor Manufacturing Act will make existing resources available to producers of semiconductor equipment. This work is essential to decrease dependency on companies controlled by the Chinese Communist Party, restore global supply chains, and directly benefit manufacturers in Oak Ridge and Nashville, Tennessee.”
“If we’re serious about addressing the supply chain crisis and maintaining our country’s competitive edge over adversaries like China, we have to invest in the entire semiconductor supply chain. Our bipartisan legislation ensures that the next generation of microchip manufacturing tools and materials can be made in the United States, creating high-paying jobs, addressing the global chip shortage, and advancing the development of critical next-generation semiconductor technology,” said Senator Kelly.
“This legislation recognizes the vital importance of semiconductor manufacturing equipment and materials to the semiconductor supply chain and will ensure that facilities to produce these indispensable items in the United States are eligible for grants under the CHIPS Act. Investing in the expansion of these facilities will make the United States more globally competitive, create thousands of new, high-paying U.S. jobs and ensure that new semiconductor production facilities start and ramp production as quickly as possible,” said Ajit Manocha, President and CEO of SEMI. “By ensuring the Department of Commerce has the flexibility to provide incentives for the production of semiconductor equipment and materials, this legislation will strengthen the entire semiconductor supply chain, help alleviate shortages of semiconductors affecting countless key industries and mitigate them in the future.”
The Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, which Peters helped pass into law as part of last year’s national defense bill, authorizes federal incentives to build semiconductor manufacturing plants in America. Peters’ new bipartisan bill would ensure these incentives are also available to those who produce necessary materials and manufacturing equipment – allowing more manufacturers to utilize these incentives.
Peters has repeatedly pressed for action to address the semiconductor shortage crisis. Peters, who serves on the Senate Commerce, Science and Transportation Committee, secured multiple provisions in the competitiveness package that passed the Senate this year to address the semiconductor shortage – particularly for the future. Peters worked closely with Senator Debbie Stabenow (MI) on provisions to create a $2 billion supplemental incentive fund to support the domestic production of mature semiconductor technologies in the coming years and will ensure that semiconductor projects that support critical manufacturing industries are given priority status, which would include the automotive sector. This is in addition to $50 billion already in the bill to incentivize the production of semiconductors of all kinds in the U.S.—for a total of $52 billion.
As the authors of the $2 billion supplemental incentive fund provision, Peters and Stabenow recently urged Congressional leadership to ensure their provision is included in the final competitiveness package. Peters also led a letter to the Taiwanese government urging it to increase chip production and do everything possible to mitigate the ongoing chip shortage. Peters has raised this supply chain disruption repeatedly with numerous Biden Administration officials in conversations both before and after President Biden took office.