NEW ALBANY, Ohio (WCMH) – A bill could see a vote Tuesday that would sway Intel’s plans to spend billions to expand its semiconductor manufacturing to central Ohio.
Sources within the U.S. Senate told The Hill that Democratic Senate Majority Leader Charles Schumer could hold a vote early in the week on the CHIPS Act, which would provide around $52 billion in incentives for U.S. semiconductor chip makers like Intel Corporation. Standing for Creating Helpful Incentives to Produce Semiconductors for America, it is an initiative by U.S. lawmakers to make American semiconductor manufacturing more competitive with China.
Intel is spending $20 billion to build two semiconductor chip fabrication plants in New Albany in an effort to manufacture more of them within the United States. Similar to its existing fab in Chandler, Arizona, the company’s Ohio announcement is already attracting neighbors, including a $200 million vitamin factory and a tech park by VanTrust. However, in June, Intel announced it would delay the groundbreaking ceremony for its New Albany plant because the CHIPS Act was stalled in Congress.
“We’re moving in a lot of different places,” Intel Ohio General Manager Jim Evers told NBC4 of the delay. “In order to be able to go fast, and we can do some great things and make that site the biggest manufacturing site for Intel, it can be bigger than this Arizona site, which is quite a dream for me, we need some help to do that. The CHIPS Act can help with that.”
Lt. Gov. Jon Husted gave further insight Monday on what Evers meant, saying funding from the CHIPS Act could increase the budget for Intel’s Ohio plan by $80 billion.
“The size and the scope of the Intel project depends on the CHIPS Act,” Husted said. “If the CHIPS Act passes, I think you’re going to see growth in central Ohio and the Ohio economy in ways that we’ve not seen in our lifetime.”
The CHIPS Act, according to the Semiconductor Industry Association, provides $52 billion in funding to strengthen American semiconductor chip research, design and manufacturing. It also includes investments in “advanced development,” like creating a National Semiconductor Technology Center. The CHIPS Act originally introduced in the 2019-2020 legislative session included tax credits for semiconductor manufacturing facilities and equipment as well, but those were removed when the CHIPS Act was reintroduced in a 2021 package.
While the CHIPS Act is perhaps one of the most widely spoken-of pieces of legislation recently, its latest variation actually a provision within another bill. That one is known by another name: the United States Innovation and Competition Act of 2021. That legislation containing the CHIPS Act was introduced more than a year ago, and two different versions of it exist: one passed in the Senate and another in the U.S. House of Representatives.
It’s here where the first of three issues voiced around the CHIPS Act:
- Picking which version of the bill to move forward with
- A hostage situation involving another bill
- Other semiconductor outsourcing companies eyeing a different bill
While Intel announced groundbreaking ceremony delays over the CHIPS Act, a spokesperson also confirmed that the corporation had confidently put construction crews’ boots on the ground on July 1. And the pressure is on to pass the CHIPS Act from companies and politicians too, like State Sen. Jay Hottinger (R-Newark).
“I’ve heard some economists say that anywhere from a third to a half of the inflation problem we’re facing today can be traced back to the chip shortage,” Hottinger said.
The Senate version of the USICA bill included $52 billion in incentives for semiconductor manufacturers and passed that chamber of Congress in June 2021. However, the U.S. Congress website does not document any further action on that bill after that month.
The House version is much more extensive and passed both the House and Senate by March 2022. That version of the bill is marked as “Resolving Differences” on the U.S. Congress website, and the next step would be going to the president’s desk.
Senate Minority Leader Mitch McConnell saw two options for getting the CHIPS Act through, saying that the House could either work on the slimmer Senate version of USICA, or cut the CHIPS Act out of the larger House version and pass it as its own individual bill.
A separate roadblock to the CHIPS Act exists in what Sen. Sherrod Brown (D-Ohio) described as a hostage situation. Brown said McConnell threatened to block the legislation if Democrats attempt to pass an unrelated bill that would lower the cost of prescription drugs.
“He’s thinking, I guess, drug company executive compensation and drug company interests are more important than Ohio jobs, and that’s pretty tragic,” Brown told NBC4’s D.C. Bureau on July 15.
Brown was referring to one measure of a domestic spending bill that Democrats have simultaneously worked on as the USICA bill awaited passage. Though McConnell was weighing options for how to pass the CHIPS Act, he also promised in a June 30 tweet to stop it if Democrats made moves on that other bill.
“Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill,” McConnell wrote on Twitter.
Senate Democrats, who hold a razor-thin majority over Republicans, could have used a party-line vote to pass the spending bill. However, with lone opposition from Democratic Sen. Joe Manchin, Business Insider reported Democrats had to cut down their envisioned bill to a shadow of its former self.
Another hat in the ring: The FABS Act
Other companies have expressed their own concerns about the CHIPS Act, saying it’s written ambiguously for companies who don’t handle their own manufacturing. Companies like Nvidia and Qualcomm — which design semiconductor chips but outsource their production — want a similar kind of incentive, Reuters reported. Because designers don’t need to build fabrication plants, they wouldn’t see a direct benefit.
Alongside the CHIPS Act, another bill called the FABS Act surfaced in Congress, which would create a semiconductor investment tax credit for companies that buy gear to make chips. Like the CHIPS Act, it has both a Senate and House version. The key difference is the Senate bill only provides the tax incentive for semiconductor manufacturing, while the House bill includes language to give credit for semiconductor design expenditures too.
The Semiconductor Industry Association, which represents multiple semiconductor companies, said it wants the benefits to go to all parties.
“The FABS Act should include expenditures for both manufacturing and design to help strengthen the entire semiconductor ecosystem,” SIA wrote in a release.
So far, the FABS Act has only been introduced in each chamber, with no other action taken on either version.
Brown, focused on the CHIPS Act, wants to see a final vote on the measure before U.S. Congress goes on recess on Aug. 4. Intel CEO Pat Gelsinger seemed to cement that deadline in a Friday interview with CNBC.
“Do not go home for August recess until you have passed the CHIPS Act, because I and others in the industry will make investment decisions … Do you want those investments in the U.S.?” Gelsinger said. “Or, are we simply not competitive enough to do them here, and we need to go to Europe or Asia for those? Get the job done.”