WASHINGTON — The global race to federal make the next generation. Of computer chips has reached Nebraska — and dozens of other states.
In the coming months, the government plans to begin doling. Out more than $50 billion in semiconductor. Manufacturing and research as part of the Chips. And Science Act signed into law last year. That much cash potential has caused a scramble among states to pitch themselves as the best. Places to spark a semiconductor boom.
The CHIPS Act was designed to help strengthen America’s supply chain. When it comes to producing computer chips used in everything from coffee. Makers and cars to pacemakers and missiles. Although the measure was focused on addressing national economic. And security concerns about the lack of domestic manufacturing.
It presented an open opportunity for state and local governments.
More than a dozen states have begun combining incentive packages with tax credits. Zoning changes and regulatory red tape to lure a limited number of companies. Looking to expand their chip manufacturing in the U.S . According to semiconductor industry data. Associations and interviews with industry leaders and executives.
“We haven’t had this kind of economic potential since corn.” Said Nebraska state Sen. Mike McDonnell. Who has introduced legislation to smooth the way for chipmakers to expand in his state. “It’s a big idea and it’s something that can help change the state of Nebraska.”
National security experts and corporate executives have for years. Urged the United States to do more to bolster its domestic chip production. With Taiwan making 92% of the world’s most advanced chips.
But the problems during the pandemic came into stark relief.
When Covid took off and supply chain disruptions led to a global shortage of chips. Leading to shortages of machinery, cars and manufacturing equipment. Adding to the urgency are rising tensions between the U.S. . And China and concerns that China may move to annex Taiwan, jeopardizing U.S. chip supplies.
In anticipation of federal funding. Semiconductor companies have already made billions of dollars in commitments. Since the bill’s introduction in spring 2020, companies. Have announced plans for $187 billion in new. Or expanded semiconductor facilities in 16 states that will create more than 30,000 jobs. According to the Semiconductor Industry Association.”it’s hyperbole to say it’s unprecedented and historic.” Said Dan Berglund, head of the state Science. And Technology Institute, about the influx of federal. And state funds to expand manufacturing. “Among the CHIPS Act and other bills passed by Congress last session. It has the opportunity to completely restructure or reshape. The face of American manufacturing.”
Competing for the next big contract, state officials are proposing tax cuts. And easing regulations while touting everything from.
Their electric grids to reliable weather to lure chipmakers.
In Michigan, officials hope to use its auto industry. And skilled manufacturing workforce to their advantage. The state has also tried to promote its weather as an advantage. Since despite the cold winters, the state is isolated from extreme. Weather events such as hurricanes, floods or wildfires. The state has already seen an increase in chip-based electric vehicle. And battery manufacturing facilities, driven by separate legislation. Last year that provides incentives for electric vehicle production.
“It’s like nothing I’ve ever seen before,” said Quentin Messer. Head of the Michigan Economic Development Corporation. “Once, if you had a $1 billion opportunity, you’d feel ‘Wow, I’ll never see this again.’ Now we have a pipeline of over 20 projects worth at least $1 billion.”
In Kansas, officials are “locked and loaded.” With many proposals for federal dollars as soon as the application process opens. According to Paul Hughes, deputy secretary of business. Development for the Kansas Department of Commerce.
He said state officials have been talking to the company.
And the Biden administration for months to sharpen their pitch. Which would focus on the end-stage of chip. Manufacturing in aerospace and defense-related industries.
But competition for dollars will be fierce, with several states. Spending years laying the groundwork to become semiconductor hubs.
Before moving to Kansas, Hughes worked. On federal Arizona’s effort to convince Taiwan Semiconductor Manufacturing Co.. The world’s largest chip maker. To open a $40 billion facility there, which the company announced last year. But he said those kinds of opportunities are slim and may be beyond expectations for some states.
“It gets competitive so it will be interesting to see how some of these states fare,” Hughes said. “You won’t get it if you don’t try. But there are a good number of them. Who are a little overzealous, or their expectations are out of line with reality.”
