MANUFACTURING

Valley leaders react to signing of CHIPS Act

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Tuesday, President Biden signed the 2022 CHIPS and Science Act into law. The bill includes more than $52 billion for U.S. companies producing semiconductors, with billions more in tax credits to encourage investment in chip manufacturing.

That could have a big impact in Arizona, where the semiconductor industry is one of the largest high-tech manufacturing spaces in the region.

While Sen. Bernie Sanders, and independent and the chair of the Senate Budget Committee, and dozens of Republicans in Congress voted against the bill, it still received bipartisan support.

It passed the Senate on a 64-33 vote, getting the support of Arizona’s Democratic Party Sens. Mark Kelly and Kyrsten Sinema, while the House vote, 243-187, split Arizona representatives along party lines.

The White House said Tuesday multiple companies, “spurred” by the CHIPS bill, have announced more than $44 billion in new semiconductor manufacturing investments.

Sinema said in a statement the bill’s funding will help businesses like the Taiwan Semiconductor Manufacturing Co., which is building a large facility in North Phoenix.

“The CHIPS Act funding will help TSMC AZ and its partners reach our full potential in Phoenix, bringing thousands of high-wage, high-skilled jobs to Arizona and revitalize advanced semiconductor manufacturing in the U.S,” Sinema said.

Phoenix Mayor Kate Gallego posed with TSMC leadership Tuesday for a photo opportunity as part of a meeting, praising Biden’s signing of the bill.

“We appreciate the work Sen. Sinema and partners on the state and local level have done to ensure the CHIPS incentives get across the finish line,” said Taiwan Semiconductor Manufacturing Co. AZ President & CEO Rick Cassidy in the statement.

While TSMC is the latest company to open or expand operations in the region, it’s by far not the only one. Intel Corp.’s operation in Chandler is the region’s largest semiconductor manufacturing facility with about 11,000 workers.

Other firms representing the industry include large global players such as Chandler-based Microchip Technology Inc. and Phoenix-based onsemi. Together, the industry supports more than 30,000 jobs in the region, with more expected once TSMC is finally open.

Kelly, speaking on Senate floor just after he cast his vote on July 27, said the U.S. produced, at one point, 40% of the world’s microchips, but that’s now down to 12%.

“This bill we provide assurance against future supply-chain disruptions,” he said.

However, in addition to Sanders’ concerns about the tax giveaway will help grow giant corporations, Republicans from the Valley were unimpressed. Rep. Debbie Lesko, a Republican who represents the congressional district serving much of the northwest Valley, noted there is no mechanism in the bill to stop companies from pulling out of U.S. locations or using the breaks and funding to expand in other countries.

“There are also not sufficient guardrails to prevent these funds from supporting semiconductor manufacturing in China or prevent businesses from expanding operations in China,” Lesko said in a tweet.

The Congresswoman said adding to the federal deficit with more spending is not the best way to create job growth.

“It’s irresponsible to spend nearly $280 billion and add billions to our national deficit at a time when our nation is entering a recession,” she wrote. “And Congressional Democrats are pushing to spend billions more through another partisan reconciliation package.”

East Valley Republican Rep. David Schweikert voted against the bill. He and fellow Republican Reps. Paul Gosar and Andy Biggs didn’t make formal statements about the bill’s signing by Biden.

Sandra Watson, president and CEO of the Arizona Commerce Authority, praised both Congressional Democrats and Arizona’s Republican governor for helping make the CHIPS Act a law.

“Excited to see #CHIPSAct has passed Congress - the culmination of years of collaborative efforts!” Watson tweeted on July 28. “Under Gov. @DougDucey, Arizona has become the premier destination for semiconductor investments, and we’re well positioned to benefit from funding advanced in the bill.”

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