Congress STALLING on Important Law – Are They Failing America?
(UnitedVoice.com) – Almost everything that one uses today requires a chip of some sort. Cars, computers, phones, appliances, and everyday items for your home like thermostats and HVAC units. Yet, since the pandemic’s beginning in 2020, supplies have waned after manufacturing dropped, and supply chain issues crippled product availability and contributed to significant price increases.
In January 2021, the Democratic-led Congress passed the $52-billion CHIPS for America Act. The legislation should have incentivized companies to invest in the research, design, and manufacturing of chips in the United States. The biggest names in technology are leveraging the free money despite their massive profits. Now, they’re threatening to back out of the deal if Congress doesn’t fund the legislation by the August break.
Are Chip Companies Shaking Down America?
In the early 1990s, US companies manufactured 37% of semiconductors used worldwide. In 2022, it dropped to 12%. Taiwan manufactures most chips, but that’s causing concern as China continues threatening to overtake the island and absorb it back into the Chinese communist government. Plus, there are concerns about manufacturing in other countries and significant supply chain issues preventing chips from getting into the products Americans need and want.
On Monday, June 27, Commerce Secretary Gina Raimondo said companies are growing impatient with Congress’s inability to fund the CHIPS Act. So, who are the players involved threatening to back out if Congress doesn’t provide them the $52 billion?
- Taiwan Semiconductor Manufacturing Corp. said it planned to build a $12-billion plant in Phoenix, Arizona. Yet, company officials say they will only go forward if Congress passes the CHIPS Act to help the company recapture the difference in doing business in the US versus Taiwan. TSMC is the largest chip manufacturer in the world.
- GlobalWafers, a Taiwan-based company, plans to construct a manufacturing plant in Sherman, Texas. It said it would create 1,500 American jobs and manufacture 1.2 million chips per month. Company officials say they could hold off unless Congress provides them with $5 billion to build the factory.
- Intel suspended its construction of a $20-billion plant in Ohio until Congress funds the CHIPS Act.
Each one of these companies is massively profitable. So, the question is, are they shaking down US taxpayers? After all, even if they make chips in the US, it’s likely they’ll still sell them to the highest bidder.
More Demand Than Supply
University of Virginia Professor Zachary Collier said there’s much more demand for chips than supply. He argued that Congress must fund the CHIPS Act as fast as possible and moving forward, the need for chips will only rise. The challenge is the shortage makes it easy for chip manufacturers to pit countries against one another in a bidding war to host manufacturing facilities bought and paid for by those countries.
Still, Secretary Raimondo says if the US wants to be less reliant on overseas manufacturers for chip supplies, arguably a critical item for security and defense reasons, Congress is running out of time. She warned that semiconductor demand would skyrocket over the next decade and said it takes years to build a facility before one becomes operational.
So, will Congress fund the CHIPS Act, or will companies take their factories to countries that will? Does it make sense for Congress to subsidize these companies with taxpayer dollars for US security reasons?
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