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Biden signs $280B CHIPS act in bid to boost US over China, touts ‘fundamental change’

President Joe Biden talks on the phone with German Chancellor Olaf Scholz, May 5, 2022, in the Oval Office. (Official White House Photo by Adam Schultz)
August 11, 2022

 President Joe Biden on Tuesday signed a $280 billion bipartisan bill to boost domestic high-tech manufacturing, part of his administration’s push to boost U.S. competitiveness over China.

The ceremony on the South Lawn on Tuesday included several Democratic Michigan policymakers, including U.S. Reps. Debbie Dingell of Ann Arbor, Haley Stevens of Waterford Township and Brenda Lawrence of Southfield.

Detroit Mayor Mike Duggan, state House Democratic Leader Donna Lasinski of Scio Township and state Rep. Mari Manoogian of Birmingham were also in attendance.

The president aimed to highlight a new law that will incentivize investments in the American semiconductor industry in an effort to ease U.S. reliance on overseas supply chains for critical, cutting-edge goods.

The legislation will appropriate $52 billion in subsidies and $24 billion in tax credits for the computer chip industry, including $2 billion set aside for “legacy” chips used in autos, pushed for by Michigan Sens. Gary Peters, D-Bloomfield Township, and Debbie Stabenow, D-Lansing. It will also set aside $100 billion over five years for research programs through the National Science Foundation.

It’s been a priority for the U.S. automotive industry, which has struggled under repeated work stoppages over the last two years due to a global chip shortage. Thousands of chips go into each vehicle, which are used for everything from power steering to infotainment. Electric vehicles require even more chips.

“Well I’ll tell you what,” Biden opened his speech. “Detroit’s making some really hot vehicles.”

He joked he had a “commitment” that he would be able to buy the first electric Corvette, which General Motors Co. announced it planned to build earlier this year. He was joined on stage by Speaker of the House Nancy Pelosi, Senate Majority Leader Chuck Schumer and Commerce Secretary Gina Raimondo.

Proponents of the legislation have argued it is critical to U.S. competitiveness as it emerges from a global shortage that showcased how the U.S. economy and defense capabilities hinge on production near one of its chief economic rivals, China.

“Fundamental change is taking place today,” Biden said. “Change that can either strengthen our sense of security, of dignity and pride in our lives and our nation — or change that weakens us.”

Biden said Micron is announcing a $40 billion plan to boost domestic manufacturing of memory chips, and Qualcomm and GlobalFoundries are announcing a $4.2 billion expansion of an upstate New York chip plant.

The U.S. produces only 12% of the world’s microchips, compared with 37% in the 1990s. Around three-quarters of the world’s chip manufacturing capacity is in east Asia, and more than 90% of the world’s capacity for the most advanced chips is in Taiwan, which faces possible military incursions from China. None of the most advanced chips are currently produced in the U.S.

The Semiconductor Industry Association estimates it costs 30% more to build a chip fab in the U.S. than in Taiwan, South Korea or Singapore, and up to 50% more than in China.

Biden said the bill would “supercharge” the country’s ability to build the crucial chips for autos, electronics and appliances.

“I promise you: We’re leading the world again for the next decades,” he said before signing the bill. Dingell and Stevens joined him on stage as he signed.

“It’s a huge deal,” Duggan told The News. “We’ve got easily 15,000 to 20,000 jobs in this city directly dependent on a reliable supply of chips.”

Gov. Gretchen Whitmer, Sens. Debbie Stabenow, D-Lansing, and Gary Peters, D-Bloomfield Township, Ford Motor Co. CEO Jim Farley, GM CEO Mary Barra, the Semiconductor Industry Association, and Autos Drive America, which lobbies on behalf of foreign automakers building cars in the U.S., praised the legislation Tuesday.

“This historic, bipartisan legislation will empower Michigan workers, surge domestic manufacturing, and lower costs for consumers,” Whitmer said in a statement.


(c) 2022 The Detroit News

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