This story has been updated
President Biden virtually joined Michigan Gov. Gretchen Whitmer on Tuesday in a signing ceremony empowering Michigan to take advantage of U.S. CHIPS and Science Act grants boosting domestic semiconductor production following last week’s passage of the bill in Congress.
“We’re back in the game,” President Biden said in a virtual event as he recovers from Covid at the White House residence. “There’s not a thing we can’t do. Remember: We invented these chips and modernized these chips. We made them work and there’s a lot more we can get done…Have faith in our country, have faith in what we can do.”
The Act provides $52 billion in manufacturing grants and other measures even amid concerns by conservatives and U.S. Sen. Bernie Sanders that it is a form of corporate welfare given to highly profitable and revenue-rich companies.
Nonetheless the bill passed the Senate by 64-33 and the House by 243-187. Biden has yet to sign the bill and apparently is waiting to recover from Covid before doing so in person.
The president on Tuesday defended the bill for including guardrails to prevent companies from abusing the use of grants. He said it is “not a blind check to companies” and assured critics that companies will see grants revoked if they don’t live up to the terms of the bill. The funds are not meant to support stock buybacks at companies, he said, and will push companies to support technical schools and work with minority businesses.
He predicted 1 million jobs will be created with construction of facilities and factories in addition to high-paying technical jobs at plants. Companies like Intel have backed the CHIPS Act as a way to help finance major chip plants in the U.S., including two for Ohio valued at $20 billion.
The virtual event was staged at Hemlock Semiconductor in Michigan, the largest producer of polysilicon in the U.S. and a potential beneficiary of the CHIPS Act funding. Members of the Michigan congressional delegation appeared onstage at a Hemlock plant along with Michigan Gov. Whitmer, describing potential downstream benefits of the act for workers in the state. She signed an executive directive to empower Michigan to take advantage of the federal act.
About $2 billion of the $52 billion is earmarked to support legacy chips used in vehicles, something Michigan officials supported because of the shortage of chips that stunted vehicle manufacturing so critical to the state’s economy.
In an ironic twist, semiconductor sales in the Americas, led mainly by the U.S., soared by 29% in June compared to a year earlier, according to a new report.
The Americas saw chip sales of $12.09 billion in June, up from $9.37 billion in June 2021, according to the Semiconductor Industry Association on Monday, based on a tally of the World Semiconductor Trade Statistics organization.
Globally, sales for the month of June were $50.8 billion, down by 1.9% from May but up by 13% from a year earlier. For the second quarter, global sales reached $152 billion, up by 13% from a year earlier.
SIA CEO John Neuffer noted in a statement that market growth has slowed in recent months with the year-to-year growth of 13% dipping below 15% for the first time since February 2021. Neuffer still called second quarter sales “robust across all major regional markets and product categories.”
SIA and other trade groups have praised the passage of the CHIPS Act and related measures for science research even amid criticism that the chip industry is highly profitable with strong revenue growth. Conservative Republicans and U.S. Sen. Sanders, an independent from Vermont who caucuses with Democrats, saw the measure as corporate welfare with a total price tag of $76 billion, part of a $280 billion package.
“Should American taxpayers provide the microchip industry with a blank check of over $76 billion at a time when semiconductor companies are making tens of billions of dollars in profits and paying their executives exorbitant compensation packages?” Sanders said in a speech on the Senate floor.
The SIA has strongly defended the CHIPS Act subsidies to help the U.S. compete against other nations that boost manufacturing with subsidies. Some supporters also said the measure will increase U.S. security, since more than 90% of advanced chips are made in Taiwan. If Taiwan were invaded by China or shipping channels cut off, much of the world would face a crisis, supporters have noted.