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Two huge chip makers warn of expansion delays

UPDATED: Thu., June 23, 2022

A PixabayA-central-processing unit, or computer chip, is installed on a computer in this photo from 2021. Congress has yet to pass a $52 billion subsidy to boost U.S. chip production.  (Spokesman-Review wire archive )
A PixabayA-central-processing unit, or computer chip, is installed on a computer in this photo from 2021. Congress has yet to pass a $52 billion subsidy to boost U.S. chip production. (Spokesman-Review wire archive )
By Jeanne Whalen</p><p> and Marianna Sotomayor Washington Post

WASHINGTON – When the Senate passed a rare bipartisan measure last summer to spend $52 billion subsidizing computer chip manufacturing and research in the United States, it seemed like an easy legislative priority for both parties.

Chips were in such short supply that auto factories were shutting down for weeks at a time, threatening jobs and driving up prices.

New cars became so rare that used cars soared in price, sometimes exceeding what they had cost when they were new.

Manufacturers of seemingly everything, from products as different as smartphones and dog-washing booths, complained they couldn’t get the chips they needed.

The White House called several emergency meetings, and Republicans and Democrats quickly rallied.

But one year later, the funding still isn’t signed into law.

It took the House until February to agree to the subsidies.

Since then, the process of combining the House and Senate bills has been bogged down over disputes about elements of the legislation unrelated to chips, including climate provisions and trade with China.

Myriad other issues, including military aid for Ukraine and gasoline price inflation, have also distracted lawmakers.

Proponents of the chips funding say they are racing to salvage it before Congress breaks for its August recess, after which election season will probably stifle prospects for any big, new legislative packages.

Large chip manufacturers, meanwhile, say the lack of subsidies is slowing down their U.S. investment plans, including Intel’s $20 billion chip-factory project in Ohio.

“As we said in our January announcement, the scope and pace of our expansion in Ohio will depend heavily on funding from the CHIPS Act,” Intel spokesman William Moss said in an emailed statement Thursday. “Unfortunately, CHIPS Act funding has moved more slowly than we expected and we still don’t know when it will get done.

“It is time for Congress to act so we can move forward at the speed and scale we have long envisioned for Ohio and our other projects.”

GlobalFoundries, which has started preliminary work to expand a manufacturing site in Malta, New York, issued a similar message.

“The CHIPS Act makes the U.S. semiconductor industry more competitive globally. For GlobalFoundries, the passing of CHIPS funding would affect the rate and pace at which we invest in expanding our U.S. manufacturing capacity,” Steven Grasso, GlobalFoundries’ managing director of global government affairs, said in an email.

House and Senate leadership met Tuesday to try to hammer out an agreement.

They did not emerge with a deal on what to include in the final bill, but they agreed that they must act quickly to prevent chip

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