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Michigan Celebrates $52B Semiconductor Package

The CHIPS and Science Act is awaiting signature from President Biden after it received approval from Congress last week. Many expect the legislation to be a huge boost to Michigan’s auto industry.

(TNS) — President Joe Biden virtually celebrated with Michigan leaders as $52 billion in semiconductor incentives move closer to becoming a reality.

The CHIPS and Science Act is currently awaiting Biden’s signature after Congress approved it last week. The legislation will promote domestic semiconductor production and research.

Biden had to cancel his in-person trip to Michigan after testing positive for “rebound” COVID-19 over the weekend. The president attended virtually while Gov. Gretchen Whitmer and U.S. Rep. Dan Kildee met at the Hemlock Semiconductor plant near Saginaw.

Kildee, D- Flint Township, opened the remarks b saying he was tired of seeing General Motors trucks sit on the lot in his hometown of Flint because of America’s reliance on overseas chip production.

“America’s economy [and] Michigan’s workers should not have to rely on foreign semiconductor chips,” Kildee said.

Semiconductors were invented in the United States. The nation remains a leader in innovation and has nearly half of the global market share for semiconductors. However, only 12 percent of the assembly happens in America, according to the 2021 Semiconductor Industry Association report.

Asia is home to about 75 percent of the world’s total semiconductor manufacturing capacity. China is projected to command the largest share of global production by 2030. The industry association points to the Chinese government’s massive investments in this sector as the reason for its rapid expansion.

Biden hailed the bipartisan CHIPS package as an example of the government coming together for a common goal to recharge the American economy and remain competitive with China.

“Remember, we invented these chips, we modernized these chips. We made them work. There’s a lot more we can get done,” Biden said. “Please, please, please, have faith in our country and faith in what we can do. As I said, there’s nothing beyond our capacity.”

Within the package, $2 billion is set aside specifically for production incentives for semiconductors used by automakers and parts suppliers. Democrats Sen. Gary Peters and Sen. Debbie Stabenow are hailing that piece of the package as Michigan’s big win. Both attended the Hemlock event virtually.

“This is a big freakin’ deal for Michigan,” Stabenow said. “We’re seeing a renaissance in manufacturing here in Michigan and in America.”

The semiconductor shortage has idled the auto industry, impacting 575,000 jobs and pausing 300 days of work this year. In total 2.2 million vehicles were lost in the production gap, according to AutoForecast Solutions.

Automotive takes up a small share, about 11 percent, of the global demand for semiconductors. However, the future of auto is relying on chips being in full supply as more technology is added to vehicles and manufacturing shifts to electric and autonomous vehicles.

Biden reflected on when the auto industry was in dire straits in the wake of the 2008 recession. Refusing to let the industry go bankrupt was a sign of faith in the auto industry’s future, he said.

“The auto industry is the heart and soul of the nation,” Biden said. “One of the reasons why I’m so excited about the CHIPS and Science Act is that it sees that future for decades to come.”

Nearly a third of the world’s chips are made from polysilicon produced at Hemlock Semiconductor. Biden praised their work adding, “Imagine if we had more of these kinds of factories doing some of the most sophisticated manufacturing in the world.”

The legislation aims to do exactly that and Gov. Whitmer is eager for that domestic production to happen in Michigan.

While at the event, Whitmer signed an executive directive to instruct state departments and agencies to leverage all available resources from the CHIPS and Science Act to continue bringing in projects and jobs to Michigan.

“Michigan’s putting the world on notice,” Whitmer said. “We will compete for every project, every program and every resource.”

The directive requires each department and agency to identify a designee to facilitate inter-departmental coordination and outreach with potential private sector, higher education, and state partners.

Additionally, it instructs departments and agencies to identify opportunities for workforce development geared towards the needs of the semiconductor industry, including adapting existing programs, collaborating with higher education institutions, and providing targeted education and training with additional federal resources.

In practice, that directive urges efficient approval of any permits, applications, or requests from the state to avoid duplication or delay.

Earlier this year, the state used $1.5 million in CARES Act dollars to fund the Semiconductor Career and Apprenticeship Network Program to build a workforce for the future of semiconductor production and research.

Whitmer’s administration highlighted Michigan companies already competing in the semiconductor industry. In the past year, the following semiconductor and polysilicon manufacturing sectors have expanded in Michigan:

  • Hemlock Semiconductor, a leading provider of high-purity polysilicon products for the electronic and solar power industries, onboarded over 400 full-time employees in Hemlock.
  • KLA, a global semiconductor firm, opened their headquarters in Ann Arbor, creating 600 good-paying jobs.
  • Wacker, a chemical and polysilicon firm, opened a cutting-edge innovation center in Ann Arbor, creating 300 good-paying jobs.
  • SK Siltron, a semiconductor wafer manufacturer, announced a new facility near Bay City, creating 150 good-paying jobs.
  • Calumet Electronics, one of a few American manufacturers producing organic substrate components for microelectronics, announced an expansion creating 80 jobs in the Keweenaw Peninsula.

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