As you do your holiday shopping, you’ll notice more shortages than ever of high-tech items that require microchips. It is hitting all economic sectors in one way or another.
Chips were invented in the U.S. But now, only 12% are made here. 0% of the more sophisticated chips are made in the USA. Those are made in Taiwan and China.
The Detroit Big 3 carmakers have been forced to slow or stop production. The industry will lose out on making and selling 1.2 million vehicles this year costing $210 billion.
The Chips Act has passed the U. S. Senate. It will provide $52 billion to the Commerce Department for grants and loans for made in the USA microchips. Commerce Secretary Gina Raimondo said during a roundtable discussion in Metro Detroit, “In order for a company to receive any money, they have to build a facility in America employ Americans. And as I said earlier, there will be numbered strings attached.”
That discussion was this morning inside UAW Region 1-A in Taylor. U.S. Rep. Hailey Stevens said, “We're talking about the most critical issue to Michigan right now.”
Part of the federal money will go to job training but not necessarily requiring them to be union jobs. UAW President Ray Curry said during the discussion, “We have a challenge to make sure that this never happens again.”
Some members of Congress at the table say before the money is approved in the House, they want to address low-cost labor competitive issues between Asia and the U.S. Rep. Dan Kildee says, “If we continue to see forced labor in China. For example, high grade polysilicon using slave labor. Hemlock semiconductor right here in the United States right here in Central Michigan can't produce that material and be competitive.”
General Motors Global Purchasing Vice President Shilpan Amin said carmakers demand for chips will double in the next 5 years because they’re adding more safety measures. “Whether it’s in front camera detection, whether it's side blind zone alert, whether it's our airbag response systems, we continue to put innovation and technology to keep people safe in our vehicle,” Amin said.
The Commerce Secretary says they want the money approved by Congress by the end of the year for President Biden’s approval. From then, building chip plans from scratch will take more than a year.