Kelly Statement on Progress to Tackle Global Supply Microchip Shortage

House bill includes Kelly-negotiated $52 billion microchips provisions passed by the Senate

Today, Arizona Senator Mark Kelly issued this statement following the release of the House of Representatives’ version of the Kelly-shaped United States Innovation and Competition Act (USICA), which passed the Senate last June, to boost and fund much-needed semiconductor production amid a global shortage of microchip technology. The House’s legislation includes a Kelly-negotiated $52 billion plan, which he worked to secure in the Senate-passed USICA, to increase domestic investments in microchip production and research. Arizona is home to one of the largest microchip industries in the country, with nearly 30,000 jobs, and is poised to grow with investment plans from Intel and the Taiwan Semiconductor Manufacturing Company.

Over the last few months, Kelly has continued to work with Representatives Doris Matsui (D-CA) and Michael McCaul (R-TX) and Senators John Cornyn (R-TX) and Mark Warner (D-VA), the core group of House and Senate members to ensure these provisions are maintained in the House legislation and signed into law. 

“This is a critical step forward for our bipartisan plan to boost microchip manufacturing and address the supply chain challenges raising costs for Arizonans,” said Senator Kelly, a member of the Armed Services Committee. “In the seven months since the Senate passed this plan, the microchip shortage has only gotten worse, which is why I’ve been working to get this through the House. Arizona is already a leader in microchip manufacturing and I’ll keep working to get this over the finish line to bring more manufacturing and high-paying jobs to our state.”

Arizona is home to one of the largest microchip industries in the country, with nearly 30,000 jobs, and is poised to grow with investment plans from Intel and the Taiwan Semiconductor Manufacturing Company.Kelly’s plan includes the following investments which are key to boosting Arizona’s position as a leader in semiconductor manufacturing:

• $39 billion in grant incentives for construction or expansion of microchip fabrication plants,
• $10.5 billion for research and development,
• And $2 billion to support the needs of the Department of Defense through research, testing, and workforce development in coordination with industry and universities.

Currently, there is a global shortage of microchips that are used in everything from cars to military defense systems. Data released earlier today by the Department of Commerce indicates that some critical industries only have a five-day backup supply of microchips, creating significant vulnerability for future supply chain shocks. While the U.S. represented 37 percent of global semiconductor manufacturing capacity in 1990, today, just 12 percent of semiconductors are manufactured on American soil.

Kelly is an original cosponsor of the U.S. Innovation and Competition Act (USICA) and one of the lead-negotiators on provisions that ensure the U.S. can outcompete foreign competitors, including China, who are investing heavily to dominate the microchip industry.