Seven months ago, the U.S. Senate approved a $52 billion spending package to revive the domestic manufacturing of semiconductor chips that are crucial to automobiles and a potential new source of jobs in Virginia, including Henrico County, former home to a major chip factory.

Since then, the CHIPS for America Act has stalled in the U.S. House of Representatives over a disagreement on how to distribute research funding, and Sen. Mark Warner, D-Va., one of the law's lead sponsors, has reached his boiling point.

Warner, chairman of the Senate Intelligence Committee, is pushing President Joe Biden and congressional leaders to pass the legislation to help the U.S. compete against foreign manufacturers who dominate the semiconductor chip market and relieve a supply chain bottleneck that is contributing to the rise of inflation.

"It has been more than a bit frustrating," he said during a 45-minute media briefing on Thursday that was dominated by concerns over inflation and the crisis in Ukraine.

Warner and other lawmakers, including Rep. Abigail Spanberger, D-7th, are sending a letter to congressional leaders next week urging them to take action on the CHIPS Act, which is part of the larger United States Innovation and Competition Act to foster research and development.

"Securing this funding as soon as possible will help address severe shortages in the semiconductor supply chain and reestablish American leadership in global semiconductor manufacturing," they said in the letter to House and Senate leaders of both parties.

Spanberger, a member of the House Foreign Affairs Committee and a former CIA case officer, said she supports the legislation to "remain competitive with China - which will not only provide economic opportunities for communities here in Virginia, but also prevent shortages that threaten to hike the prices of cars, electronics, home appliances and other consumer goods."

The semiconductor chip industry was a major source of jobs in Henrico until 2008, when the Great Recession prompted the chip manufacturing to move offshore, primarily to Pacific Rim countries such as Taiwan and South Korea.

The U.S. share of the chip market has fallen from 37% to 12% since then, with Micron Technology, owner of an expanding factory in Manassas, the only remaining manufacturer of memory chips in the country.

The CHIPS Act includes money not only for technology research and development, but also support for construction of eight to 10 chip fabrication plants, or "fabs," as Warner calls them.

"While these fabs won't be built tomorrow, it will send a huge market signal and relieve some of the pressure on the auto industry," he said.

Henrico officials are watching closely for opportunities to attract one or more new chip factories to the White Oak Technology Park, where Qimonda had employed 2,500 people before chip manufacturers largely withdrew from the U.S. after the recession.

“Henrico and the commonwealth of Virginia have a long history of innovation in the semiconductor industry," said Anthony J. Romanello, executive director of the Henrico Economic Development Authority.

"The passage of the CHIPS Act is the tipping point that combined with our existing robust infrastructure, shovel ready sites, and talented workforce ensures the semiconductor industry can grow and increase U.S. capacity immediately,” Romanello said.

But the legislation has languished in the House after passing the Senate in late June by a 68-32 bipartisan vote.

Automobiles have become a prime example of inflation, with the cost of used vehicles soaring because production of new vehicles has been slowed by the scarcity of semiconductor chips necessary to run them.

Warner said he believes Biden has begun to focus on the issue and the urgency of passing the legislation, even if lawmakers set aside questions over research funding to resolve later.

"Let's not waste any more time [in acting] on this national security, supply chain issue," he said.

By: DocMemory
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