Commerce Secretary warns that delays on semiconductor aid could limit Intel's Ohio project

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Commerce Secretary Gina Raimondo
Commerce Secretary Gina Raimondo

Congressional foot-dragging on federal aid to the semiconductor business is putting thousands of jobs at risk in Ohio and could end up limiting Intel's investment in the state, a Biden administration official said Tuesday.

"The stakes are very high for Ohio. Ohio will stand to lose a great deal if the bill doesn’t pass or if takes Congress too long to pass," Commerce Secretary Gina Raimondo told Ohio reporters on a conference call.

"The reality is that Intel and other companies are making their decision around where to expand now and if Congress takes until the end of the year to pass this, Ohio will face a very real risk of losing jobs and losing investment," she said.

Intel announced in January a $20 billion project to build two semiconductor factories in Licking County that will employ 3,000 workers. The Silicon Valley company has said its investment could reach $100 billion and that it could eventually build eight factories, making it one of the largest semiconductor sites in the world.

The U.S. House and Senate have passed different versions of what has been dubbed the CHIPS Act, which would provide $52 billion in aid to the semiconductor business, but the two sides have been slow to reconcile differences on the legislation and get it to President Biden. The legislation has had bipartisan support, including from Ohio's two senators, Republican Rob Portman and Democrat Sherrod Brown.

The money would be spent on research, design and to help with manufacturing, according to the industry.

"Every week that goes by without this bill passing, the risk that companies like intel and other semiconductor companies go to other countries is higher,’’ Raimondo said.

Intel CEO Pat Gelsinger testified before a Senate committee in March, calling on quick action.

"The manufacturing operations at the Ohio site will produce chips with our most advanced transistor technologies," he said then.

"In addition to more than 7,000 construction jobs, the fabs are expected to create 3,000 high-paying, long-term Intel manufacturing and engineering jobs ranging from factory operators and equipment technicians to engineers and business support functions, many of which do not require a 4-year college or advanced degree."

Raimondo said other countries including China, Japan and Taiwan are moving to expand chip production as is Europe, where Intel also has announced big investments.

U.S. production of the world's semiconductors has fallen from 37% in 1990 to 12% today, and Gelsinger testified that forecasts show it will decline further without help.

Gelsinger said his goal is to see the U.S. share of world chip production grow to 30% by the end of the decade. For Europe, his goal is 20% from 9% today.

Gelsinger has said public assistance is needed because East Asian countries have significant cost advantages over the U.S.

"It has to go faster and it has to be more certain. Otherwise, Ohio will lose out," Raimondo said. "The reality is the chip shortage is very real. It's a threat to our economy, our supply chains and to our national security."

Chips are the brains that power phones, cars, hospitals, and factory floors, and have become critical to the military.

The pandemic has exposed weaknesses in global supply chains that have led to chip shortages and that has led to higher prices along with shortfalls of some products.

“Do we want these jobs created in China or do we want these jobs created in Ohio. ... China's share of global chip production already is higher than the United States of America," she said. "It's outrageous. We shouldn’t have allowed that to happen. We can't wait any longer."

mawilliams@dispatch.com

@BizMarkWilliams

This article originally appeared on The Columbus Dispatch: Commerce Secretary urges Congress to pass semiconductor aid now