Funding bill must pass to end semiconductor shortage, says Upton

U.S. Rep. Fred Upton (R-MI) led a bipartisan group of 40 fellow lawmakers in requesting that Congress swiftly pass funding for the Creating Helpful Incentives for the Production of Semiconductors (CHIPS) for America Act, which would support at least $2 billion for America’s automotive industry.

The bipartisan, bicameral CHIPS for America Act passed last year as a part of the National Defense Authorization Act for Fiscal Year 2020, S. 1790, but was left unfunded.

“The ongoing semiconductor shortage is hurting the automotive industry, American workers, and our nation’s competitiveness by the hour,” Rep. Upton and his colleagues wrote in an Oct. 21 letter sent to U.S. Speaker of the House Nancy Pelosi (D-CA) and U.S. House Minority Leader Kevin McCarthy (R-CA). “An industry that is uniquely experiencing a grim outlook — for production and jobs — for the remainder of the year, as well as the years ahead, due to the prolonged global semiconductor shortage. 

The ongoing shortage in “mature node” semiconductor chips, or “legacy chips,” which are used in today’s vehicles, are forcing manufacturers to temporarily halt production assembly lines, negatively impacting both suppliers and American workers, according to their letter, which noted that if the shortage continues, more assembly plants could face temporary shutdowns or long-term disruptions, and more workers could be laid off or furloughed.

“Right now, all of the major American automotive manufacturers are hurting and conditions are getting worse,” wrote Rep. Upton and the lawmakers, who included U.S. Rep. Debbie Dingell (D-MI). “In addition, consumers are experiencing long-delayed delivery orders and dramatic increases in vehicle prices.”

Because the CHIPS Act has not received appropriations, the U.S. Senate in June advanced the U.S. Innovation and Competition Act, which contained $52 billion to expand domestic semiconductor capacity, including a provision to provide $2 billion specifically for critical “mature node” semiconductor chips used in the automotive industry, the members wrote. 

“To address this crisis head-on and for the long-term, the first and best thing we can do is advance immediate, identical legislation that includes this important appropriation for “mature node” semiconductors,” Rep. Upton and his colleagues wrote. “Strengthening our semiconductor supply chains will not happen overnight — because of the long timeframes involved, we must begin to implement these long-term measures immediately.”