Senator Kelly Leads Bipartisan Passage of $52 Billion Investment in Microchip Manufacturing and Research
Arizona and industry leaders say this will create high-paying jobs in the state
Today, the United States Senate passed a bipartisan $52 billion plan, crafted and championed by Arizona Senator Mark Kelly, which will create high-paying jobs in Arizona by investing in American leadership in the manufacture and research of semiconductors, or microchips. The funding, passed as part of the United States Innovation and Competition Act, includes $39 billion in grant incentives for construction or expansion of microchip fabrication plants, $10.5 billion for research and development, and $2 billion to support the needs of the Department of Defense through research, testing, and workforce development in coordination with industry and universities. See a more detailed breakdown here.
There is currently a global shortage of microchips, which are used in everything from phones and cars, to computers and defense systems. The share of semiconductors and microelectronics manufactured in the United States has fallen in recent decades. While the U.S. represented 37% of global semiconductor manufacturing capacity in 1990, today just 12% of semiconductors are manufactured in the U.S., and many foreign competitors, including China, are investing heavily to dominate the industry.
Arizona is home to one of the largest microchip industries in the country, with nearly 30,000 jobs, and is poised to grow with recently announced investment plans from Intel and the Taiwan Semiconductor Manufacturing Company.
“Outcompeting China and other countries in microchip manufacturing and research is an economic and national security imperative, and I’ve been working closely with Arizona leaders, Republicans and Democrats, to increase production of microchips right here in Arizona. Arizona is already a leader in microchips, and these investments will grow the industry and bring thousands of high-paying jobs to our state. It’s my priority to not just rebuild the economy, but to reinvent it by creating jobs the jobs of the future in innovative fields like microchips and getting Arizonans the skills to work them,” said Senator Kelly.
“The City of Chandler is home to a number of industry leading semiconductor research, engineering, manufacturing and packaging firms; and as such, we are extremely familiar with the globally competitive pressures they face. The investments presented in this legislation will aid efforts to advance America’s global leadership in the critically important semiconductor industry and by extension Chandler’s position as a semiconductor destination. I thank Senator Kelly for his leadership on this important act and recognize the broad long-term economic and national security benefits it provides,” said City of Chandler Mayor Kevin Hartke.
“Thanks to Senator Kelly’s leadership, Phoenix and Arizona have the opportunity to enhance our status as leaders in semiconductor chip manufacturing, particularly with the recent arrival of global technology giants that are opening new operations here. Each of these plants brings with it great jobs and powerful economic impact on the region and the state. Sen. Kelly’s work to pass the CHIPS for America Act is critically important to secure the future of this industry in the United States,” said Phoenix Mayor Kate Gallego.
“Senator Kelly’s leadership in increasing the chips manufacturing and research in Arizona through funding the CHIPS for America Act is vital for the country and a victory for Arizona businesses and the state’s economy. At ASU, we know the Senator has handed us an assignment to educate and train the highly-skilled workforce and conduct the advanced research that the continued growth of Arizona’s semiconductor industry will require, and we will use all of our resources to support what his work has enabled,” said Arizona State University President Michael Crow.
“TSMC is moving rapidly ahead with our leading edge manufacturing facility in Arizona and applauds the Senate’s passage of the U.S. Innovation and Competitiveness Act. In particular, the bipartisan CHIPS for America program will advance America’s semiconductor ecosystem and ensure that TSMC can reach its full potential in Phoenix through the Company’s investment while bringing thousands of high-paying jobs to the state,” said the Taiwan Semiconductor Manufacturing Company.
“I am encouraged by the commitment of our Congressional leaders to support smart investments in domestic semiconductor manufacturing and R&D. Intel recently announced a $20 billion investment in Arizona. The U.S. Innovation and Competition Act includes essential federal government incentives that will drive further U.S. investment. Senator Kelly appreciates the importance of U.S. technological leadership. We are thankful for his support of the U.S. semiconductor industry and the work he does for Arizona day in and day out,” said Intel CEO Pat Gelsinger.
“Under Governor Ducey’s leadership, Arizona has emerged as an epicenter for semiconductor manufacturing. The funding contained within the United States Innovation and Competition Act of 2021 to bolster semiconductor manufacturing will enhance Arizona’s leadership role in addressing the global microchip shortage. We’re grateful to Senator Kelly for his leadership and dedication to ensuring Arizona is at the forefront of semiconductor innovation. As a top state for semiconductor manufacturing employment and semiconductor exports, we look forward to how this will positively impact Arizona for years to come,” said Sandra Watson, President & CEO of the Arizona Commerce Authority.
“We’re grateful for Sen. Kelly’s leadership in securing funding for the CHIPS for America Act that will strengthen Greater Phoenix’s legacy semiconductor ecosystem and propel the region to new heights as a leading innovation hub. This funding is critical to our economy as it will drive expansion of fabs and R&D capability in the U.S. and help provide thousands of long-term, high-quality jobs that will keep Greater Phoenix at the forefront of American manufacturing in key end-markets for decades to come,” said Chris Camacho, President & CEO of the Greater Phoenix Economic Council.
“Greater Phoenix Leadership is thankful for Senator Kelly’s leadership on this important bipartisan effort to fund the CHIPS for America Act, which will allow for continued growth in the region’s semiconductor industry. These programs will bring welcomed investments and thousands of high-paying jobs to our region. We look forward to continuing our work together in support of securing these, and additional investments, for the Phoenix-metro area’s economy,” said Neil Guiliano, President and CEO, Greater Phoenix Leadership.
“Senate passage of federal investments in chip research, design, and manufacturing is an indication of the broad recognition in Congress that for the U.S. to compete and win in the game-changing technologies of the future, it must lead the world in semiconductors. Funding the CHIPS Act would provide a big boost to America’s economy, national security, critical infrastructure, and enduring global competitiveness. We applaud the work of the bipartisan group of Senate leaders who have championed this effort, commend Senate approval today, and look forward to working with members of Congress and the Administration to get these critical semiconductor investments across the finish line,” said John Neuffer, President & CEO, Semiconductor Industry Association (SIA).
Further background on Senator Kelly’s work on microchips:
- Senator Kelly supported and voted to pass the CHIPS for America Act as part of the 2021 National Defense Authorization Act (NDAA), which established federal incentives for domestic microchip manufacturing and programs to invest in research and development of microchip technology.
- In March, Senator Kelly met with Senators Warner and Cornyn and Director of National Economic Council Brian Deese to discuss appropriations to fund the CHIPS for America Act.
- Also in March, Senator Kelly praised Intel’s announcement that it would invest $20 billion in Arizona to increase its chips manufacturing in the state.
- In April, Senators Kelly, Cornyn, Warner, and Cotton led a letter with a bipartisan group of Senate colleagues urging the Biden Administration to prioritize securing funding to implement CHIPS for America Act programs for at least the authorized levels.
- Senator Kelly has raised the issue in Senate Armed Services Committee (SASC) hearings, including on the subcommittee on Emerging Threats and Capabilities where he is the chair.
- 2/2/21 SASC Hearing on Emerging Technologies & Their Impact on National Security (2:22:20 mark). Sen. Kelly noted how CHIPS Act authorized but didn’t provide money to bring this critical capability to the U.S. and how we rely on Taiwan at the moment for our 5 nanometer chip because Intel and others cannot produce it. He asked witnesses to speak to supply chain security issues and the impact that has on us as a country.
- 4/21/21 Senator Kelly chaired an Emerging Threats and Capabilities Hearing on Department of Defense science and technology (S&T), technology maturation, and technology transition activities to meet emerging threats with witnesses who lead DARPA and the research arms of each service branch (51:05 mark). Senator Kelly asks the witnesses about the importance of semiconductors to weapons systems and national security.
- 5/25/21 SASC Nomination Hearing (2:58 mark). Senator Kelly asked Heidi Shyu, nominee to be the Under Secretary of Defense for Research and Engineering, about the importance of restoring microchip manufacturing to American shores.
- Over the past few months, Senator Kelly has spoken with leaders at Intel, Samsung, and Apple about the importance of semiconductors, securing our supply chain, and funding CHIPS for America Act programs.
- Earlier this month, Senator Kelly visited Intel to tour their manufacturing facilities and learn more about their expansion plans in Arizona.
- On May 14th, Reuters reported that Senator Kelly and a bipartisan group of Senators had reached an agreement on the funding for the CHIPS for America Act programs.
- On May 18th, the Senate began considering legislation in which Kelly worked to include $52 billion to fund CHIPS for America Act programs. Kelly released a statement praising the progress on the funding, and has continued working with Republicans and Democrats to build support and get it passed.
- On May 20th, Senator Kelly was the keynote speaker at the SEMI Virtual Forum to discuss U.S. Semiconductor Industry Incentive Proposals where he spoke with industry leaders about progress on funding CHIPS for America Act programs to increase American manufacturing of semiconductors.