How Washington is contributing to the semiconductor shortage

With a semiconductor shortage ongoing and the United States getting most of the semiconductors it uses from overseas markets, lawmakers earlier this year introduced the CHIPS Act. The CHIPS Act aims to free up approximately $52 billion in federal funding to spur more domestic production of the chips that are used in just about every consumer technology imaginable.

But with both houses of Congress still struggling to reconcile their respective iterations of the proposed bill, two leading semiconductor manufacturers say they'll have to table their ramped-up production plans until Capitol Hill hammers out a solution.

One of those companies is Intel, which in January, announced its intentions to build two semiconductor factories near Columbus, Ohio. The expectation was to begin construction in July, but as The Washington Post reported, the project will be suspended indefinitely because of insufficient funding, citing comments from the company's spokesperson.

"As we said in our January announcement, the scope and pace of our expansion in Ohio will depend heavily on funding from the CHIPS Act," said William Moss, spokesperson for Intel, in an email to the newspaper. "Unfortunately, CHIPS Act funding has moved more slowly than we expected and we still don't know when it will get done. It is time for Congress to act so we can move forward at the speed and scale we have long envisioned for Ohio and our other projects."

Legislative quarreling is placing a hold on semiconductor plant construction.

Another semiconductor company that has tied its factory development plans to the CHIPS Act's implementation is GlobalFoundries, a rival semiconductor manufacturer based in Malta, New York. In a statement obtained by Construction Dive, the company stated that while the project is poised to begin on schedule, the actual timetable will largely be influenced by government investment, among other considerations.

What is the hold-up?
What the Senate and House of Representatives appear to be at loggerheads over are some of the bill's earmarks and provisions. For example, as Reuters reported, the Senate's version of the CHIPS Act includes an additional $200 billion for scientific and technological innovation to better compete with China, the world's leading producer. The House's version of the CHIPS Act is close to 3,000 pages in length and has several trade proposals that the Senate's doesn't mention.

Other leading chip manufacturers, however, aren't letting the lawmakers on Capitol Hill influence their building plans. As the Austin Business Journal reported, Samsung recently chose Yates Construction to head up construction for the company's $17 billion chip production plant near Austin, Texas. Texas Instruments, meanwhile, just broke ground on a $30 billion facility in Sherman, which is in Northeast Texas, as reported by Construction Dive. Both chip developers are confident that their respective projects should help bolster the semiconductor supply chain, as demand continues to far outpace supply. In 2021 alone, over 1.1 trillion semiconductors were sold globally, according to the Semiconductor Industry Association.