HSGAC Chair Stumps for Semiconductor Legislation to Help Auto Industry

Sen. Gary Peters, D-Mich., chairman of the Senate Homeland Security and Governmental Affairs Committee, this week urged Congress to move toward final passage of legislation that would provide $52 billion of funding to reinvigorate the U.S. semiconductor industry and aid the domestic automotive industry.

Senate votes earlier this week cleared the way for a House-Senate conference committee to work out differences on innovation legislation that would fund the CHIPS Act to deliver that Federal support to the U.S. semiconductor sector.

The chip shortage – exacerbated by supply chain problems caused by the coronavirus pandemic – has particularly impacted the auto industry, with modern cars using well over 1,000 semiconductor chips per vehicle.

As the United States looks to the future with electric and autonomous vehicles, Sen. Peters stressed at a March 28 field hearing that semiconductor chips will only continue to play a bigger role in auto production. Sen. Peters, who also chairs the Senate Subcommittee on Surface Transportation, Maritime, Freight, and Ports within the Senate Committee on Commerce, Science and Transportation, said it is “imperative” for Congress to fund CHIPS Act.

“In particular, we need to pass legislation I led with Senator Stabenow that would provide $2 billion to incentivize the domestic manufacture of the so-called mature chips that are in short supply and that manufacturers of all kinds rely on – especially in the auto industry,” Sen. Peters said.

The $2 billion would be in addition to the $52 billion to help support the U.S. manufacturing of advanced chips and other semiconductor technologies.

On the legislative front, Sen. Peters said he was “hopeful” that the House and Senate would reach an agreement soon on the COMPETES Act legislation – which includes the CHIPS Act – that they can send to President Biden for his signature.

Peters and witnesses who testified at the March 28 field hearing emphasized the importance of incentives, such as the CHIPS Act, to boost domestic manufacturing and to ensure U.S. supply chains are resilient.

“America’s equipment manufacturers – KLA and our peer companies – do have foreign competitors,” said Robert Rathert, senior director of strategic collaborations at KLA. “We want to ensure that this equipment business stays here in America, that we’re able to serve our domestic and overseas suppliers that are important for alleviating this chip shortage, and we believe that CHIPS Act is an important part of that.”

Glenn Stevens, executive director of MICHauto, also called on Congress to fund “the type of future-oriented legislation,” such as the CHIPS Act, and agree upon a finalized competitiveness package that puts the COMPETES Act over the finish line.

“Policymakers would therefore be wise not to let the past success of the American auto industry lull us into a false sense that we will continue to enjoy such success in the future,” Stevens said. “These bipartisan pieces of legislation are our chance to secure America and Michigan’s position as a dominant leader in automotive and mobility manufacturing and innovation for the future. We shouldn’t pass this opportunity up.”