The chief executives of Intel and Micron will testify before the US Senate Commerce Committee on March 23 as industry and lawmakers make the case for $52 billion in US subsidies to manufacture semiconductor chips. The chief executive of truck maker Packer Inc. will also testify at the hearing, which will look at vulnerabilities in semiconductor supply chains and the sector’s relationship with US competition.
Maria Cantwell, chair of the Senate Commerce Committee, announced the hearing on Wednesday. Reuters previously reported the planned hearing. Two decades ago, the United States produced about 40% of all chips and today it accounts for only 12% of global production, Commerce Secretary Gina Raimondo has said. Last week, President Joe Biden met with executives from chipmakers, including Samsung Electronics Co Ltd, Micron Technology Inc. and other companies, to push the US Congress to subsidize chipmakers to ease the semiconductor crunch.
The Senate in June and the House in February approved $52 billion in subsidies in separate bills. “Get it to my desk as soon as possible,” Biden said last week.
The bills take different approaches to addressing US competition with China on various issues, as well as trade and some climate provisions. Persistent industry-wide shortages of chips have disrupted production in the automotive and electronics industries, forcing some firms to reduce production. Cantwell said it was necessary to take into account the chip shortage, which in 2021 caused the global auto industry an estimated $210 billion in revenue and 7.7 million car production losses.
“It’s 30% to 50% cheaper to build a semiconductor foundry in Asia than in the United States, mostly because of foreign government investment … we can’t wait,” she said.
Intel said it was “delighted to have the opportunity to advocate for the importance of investing in US semiconductor leadership.” In January, Intel said it would invest up to $100 billion to build potentially the world’s largest chip-making complex in Ohio.
Micron said in October that it plans to spend $150 billion over the next decade on manufacturing and research and development of globally leading memory chips. Micron said funding from Congress would “open the door to new industry investment.”
Industry association, SEMI, said in a letter to Congress that the chips funding “is critical to providing a fundamental incentive for investment in home design and manufacturing facilities for semiconductor and semiconductor devices.”
Critics such as Senator Bernie Sanders question why Congress would subsidize a large profitable industry.
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