(The Center Square) – Supply chain issues caused by the COVID-19 pandemic revealed how vulnerable the United States was to microchip shortages.
That may change with the passage of new federal legislation. Illinois manufacturers support the move.
The federal legislation that passed both chambers seeks to provide tens of billions of dollars in manufacturing incentives and research and development funding for the American semiconductor industry.
Proponents, including Mark Denzler, CEO of the Illinois Manufacturers’ Association, said the effort is vital for national security.
Denzler told The Center Square that too much microchip manufacturing has moved overseas in the past two decades. The United States remains the world leader in microchip design, but the U.S. share of microchip manufacturing has dropped from 40% to 13% in recent years.
“Today, Asia produces 70% of microchip production,” Denzler said. “Ninety percent of the high tech chips that are used in defense and aerospace are now manufactured overseas.”
For several years, IMA has been working to make sure that Illinois is well-positioned as a home for new semiconductor plants. News that Congress is moving forward with an aggressive commitment to building new semiconductor plants is exactly what IMA has wanted.
“This spring IMA championed passage of the MICRO Act (the Manufacturing Illinois Chips for Real Opportunity Act) in the Illinois legislature so that Illinois would be ready to take advantage when Congress and the president acted to incentivize new microchip manufacturing,” Denzler said.
In addition to money to build new microchip plants, a draft version of the bill proposes a 25% tax credit for research and development and $200 million for worker training.
A provision proposed in the bill designates the National Science Foundation to lead an innovation effort on the development of basic and applied research and to ramp up science, mathematics, technology and engineering education.