Richmond Times-Dispatch: ‘We’re ready’: Henrico poised as White House pushes Congress on semiconductor chip incentives

RICHMOND TIMES-DISPATCH, MICHAEL MARTZ

Henrico County has a simple message for Congress about the need for swift action on a long-delayed federal incentive package to revive the manufacturing of semiconductor chips in the United States.

“We’re ready,” said Anthony Romanello, executive director of the Henrico Economic Development Authority.

With a shortage of semiconductor chips at the heart of rising inflation, the White House said Tuesday that it is pushing the House of Representatives and Senate to reconcile their differences quickly on competing versions of a spending package to invest in research and development of up to 10 new chip manufacturing facilities in the U.S.

“I hope we are within weeks, not months of finalizing this and getting it to the president’s desk,” U.S. Secretary of Commerce Gina Raimondo said in a White House press call on Tuesday.

Sen. Mark Warner, D-Va., a leader of the effort to pass the Senate bill in June, met with Raimondo for an event that month at Micron Technology’s semiconductor plant in Manassas. Micron, with another plant in Idaho, is the only company manufacturing semiconductor chips in the U.S., but Intel announced last month that it is making a $20 billion investment in two new chip factories in Ohio.

“Now that the House has finally acted, there’s no reason for further delay,” Warner said Tuesday. “I am urging the speedy appointment of a conference committee so that the House and Senate can hammer out the differences between our respective bills and get something to the president’s desk as soon as possible.”

Henrico isn’t the only Virginia locality hoping for a revival of the domestic semiconductor industry, but the county is well-positioned at the White Oak Technology Park, where Qimonda once employed 2,500 people making memory chips before closing its plants there and declaring bankruptcy in 2009.

“It’s the perfect location, the perfect setting,” said Rep. Abigail Spanberger, D-7th, in a recent interview. “They’ve got the ability to do it.”

Chesterfield County offered the 2,000-acre Upper Magnolia Green property as one of the top three sites for the Intel project, which is expected to invest $100 billion at full build-out, according to Garrett Hart, county director of economic development.

“We’re chasing [chip fabrication plants] in a big way,” Hart said Tuesday.

Hart said big semiconductor companies are preparing now to “get ready to go and put the shovel in the ground the minute the bill passes. It is key to bringing chip manufacturing back to this country.”

Spanberger has openly voiced frustration with House leadership for waiting until early February to adopt the COMPETES Act — almost eight months after the Senate approved the U.S. Innovation and Competition Act. She called the delay “outrageous.”

Raimondo attributed the long delay to the complexity of the 2,000-page bill, which she said was reviewed by 11 House committees.

But she also acknowledged competing initiatives, notably passage of the Infrastructure Investment and Jobs Act in the fall and the failed attempt to adopt the Build Back Better spending package focused largely on helping families and combating climate change.

“There were a lot of other priorities at that time,” she said.

The need to revive the domestic manufacture of semiconductor chips has become more urgent with the rapid rise of inflation, which reached a 40-year high in January at 7.5% over the previous year.

Raimondo attributed one-third of the inflationary surge to the price of automobiles, which has soared because domestic production has been shackled by the lack of semiconductor chips that are essential to operating motor vehicles and other computer-powered goods.

“The reality is the semiconductor supply chain remains fragile and vulnerable. … They couldn’t access enough semiconductors in order to make the cars,” she said.

Biden considers the source of the problem to be the increased reliance of the U.S. on foreign production of critical goods over the past 20 years, said Raimondo, who noted that the short supply of semiconductor chips also affects sensitive equipment required by the U.S. military.

“If we want to compete globally, we have to invest domestically,” she said.

The competing bills aren’t the same, but they both focus primarily on increased investment in technological research and development, including $52 billion to boost the semiconductor industry and encourage private investment in new factories here to make chips.

Romanello called those proposed federal investments “a real tipping point for the industry.”

He won’t talk about potential economic development leads, but said, “We’ve had a number of encouraging conversations with the semiconductor industry in Henrico.”

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