The U.S. Senate voted Wednesday to approve billions of dollars for semiconductor manufacturers, which Intel leaders say will help the company ramp up its investment in central Ohio.
The legislation, known as the CHIPS Act, would allocate more than $52 billion in subsidies for companies to research, design and manufacture semiconductors. It also would provide a 25% tax credit for companies that build facilities in the U.S.
Intel announced in January that it will invest $20 billion to build two semiconductor factories in Licking County that will employ 3,000 workers. CEO Pat Gelsinger said the company’s investment in Ohio could reach $100 billion, but only if the aid package is approved by Congress.
Both Ohio Sens. Rob Portman and Sherrod Brown voted in favor of the bill.
“A big reason for the inflation we see today is decades of offshoring our supply chains,” Brown said earlier this week. “We need to bring that production back home. That’s what this bill is all about – investing more in America, making more in America.”
CHIPS Act: Subsidies, tax credit aims to increase U.S. semiconductor production
Semiconductors play an increasingly vital role in powering today’s economy. The tiny chips, typically as small as a fingernail, power everything from cell phones and appliances to military equipment vital to the nation’s defense.
Proponents say the CHIPS Act is necessary to help businesses fill supply chain gaps and make the U.S. more competitive. The U.S. once produced 37% of the world’s computer chips, but that’s fallen to 12% because of high production costs and manufacturing investments by other countries, according to industry leaders.
Asian countries have, on average, a 30% to 40% cost advantage over the U.S. because of lower building, labor and environmental standards and other factors, Intel and industry officials have said.
Silicon Valley-based Intel praised the Senate vote.
“We congratulate the Senate on its vote to fund the CHIPS Act and urge the House to follow suit,” the company said. “We will move forward together to advance American leadership in semiconductor manufacturing and (research and development), and strengthen American national and economic security.”
The U.S. Senate first passed the bill last year as part of a broader package aimed at increasing competitiveness with China. It languished for months as House and Senate lawmakers sparred over provisions unrelated to semiconductor production.
It now moves to the House, and Speaker Nancy Pelosi said it should have the votes to pass.
Exactly how much Intel would gain from the legislation depends on the extent of the company’s investment. Beyond the subsidies, Intel stands to benefit from provisions that provide advanced manufacturing investment credits, workforce and education training, and help with research and innovation.
Ohio provided Intel with more $2 billion in aid, and New Albany is giving the company a property tax abatement on the site.
“Today’s Senate action on the CHIPS Act sends an important message to the world that America is committed to our national and economic security through research and development and high-tech manufacturing,” Lt. Gov. Jon Husted said. “I encourage the House to get it passed before their summer break so Ohio and America can go to work rebuilding a domestic supply chain for computer chips and the technologies we need for our national defense systems.”
Haley BeMiller is a reporter for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizations across Ohio.
Mark Williams is a reporter for The Columbus Dispatch.