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Schumer announces American Foundries Act to bolster microelectronics sector

Posted 28 June 2020 at 11:56 pm

Legislation could be ‘game-changer’ in bringing investment to STAMP site in Genesee County

Press Release, U.S. Sen. Charles Schumer

Citing concerns that China is catching up to the U.S. in microelectronics production capacity, U.S. Senator Schumer today unveiled the American Foundries Act, a bipartisan initiative that seeks to re-establish U.S. leadership and revitalize innovation in the global microelectronics sector.

Schumer explained that the bipartisan legislation would make critical investments in domestic commercial and defense-related microelectronics manufacturing and research and development, and address economic and national security concerns by decreasing U.S. dependence on foreign-made semiconductor chips.

“The economic and national security risks posed by relying too heavily on foreign semiconductor suppliers cannot be ignored, and Upstate New York, which has a robust semiconductor sector, is the perfect place to grow this industry by leaps and bounds,” said Senator Schumer. “America must continue to invest in our domestic semiconductor industry, including companies like GlobalFoundries, ON Semiconductor, IBM and Cree right here in New York, in order to keep good-paying, high-tech American manufacturing jobs here at home. We need to ensure our domestic microelectronics industry can safely and securely supply our military, intelligence agencies, and other government needs. This is essential to our national security and to U.S. leadership in this critical industry.”

The senator noted that even though the U.S. revolutionized the microelectronic industry and invented much of the key technology used to this day, competitors in Asia, especially China, have made huge investments into their microelectronics industries in recent years to challenge U.S. leadership.

In fact, Schumer pointed out, 78% of cutting-edge wafer fabrication capacity is now based in Asia, with last year being the first year that North America fell behind China.

Schumer has long-championed increased efforts to expand the domestic microelectronics industry, supporting companies like GlobalFoundries, which houses their most advanced ‘Fab 8’ manufacturing facility in Malta, New York, IBM, and others. With New York home to multiple major companies and research institutions in the semiconductor industry, the state is positioned to securely supply the U.S. government with critical technologies and maintain U.S. leadership in this technology, offering a tremendous opportunity for New York’s semiconductor companies to expand operations, create more jobs in Upstate New York, and help the U.S. reduce its reliance on foreign semiconductor manufacturing.

Specifically, supporters of the American Frontiers Act include GlobalFoundries, IBM, ON Semiconductor, Cree, Inc., the Genesee County Economic Development Center, Hudson Valley Economic Development Corporation, Mohawk Valley EDGE, Cornell University, Binghamton University, and SUNY Polytechnic Institute.

“Senator Schumer has long recognized that our 1,250-acre STAMP site in Genesee County presents a tremendous opportunity to create thousands of high quality semiconductor jobs for the Western New York and Finger Lakes regions,” said Steve Hyde, president and CEO of the Genesee County Economic Development Center (GCEDC). “Our challenge has always been the considerable cost to get the site developed and shovel ready in the global competition to land projects of this scale. This legislation though is a game-changer in so many ways as it will support cutting-edge domestic semiconductor development and increases in semiconductor manufacturing capacity at a crucial time in our nation’s history.”

Schumer said he will aim to include the legislation as an amendment in this year’s National Defense Authorization Act (NDAA).

Senator Schumer introduced the American Foundries Act of 2020 in the Senate, along with Senators Cotton (R-Arkansas), Reed (D-Rhode Island), Hawley (R-Missouri), Gillibrand (D-New York), Risch (R-Idaho), Jones (D-Alabama), Collins (R-Maine), King (I-Maine), and Rubio (R-Florida), and details of the bill can be found below:

Support for Commercial Microelectronics Projects: Authorizes the Department of Commerce to award $15 billion in grants to states to assist in the construction, expansion, or modernization of microelectronics fabrication, assembly, test, advanced packaging, or advanced research and development facilities.

Support for Secure Microelectronics Projects: Authorizes the Department of Defense to award $5 billion in grants for the creation, expansion, or modernization of one or more commercially competitive and sustainable microelectronics manufacturing or advanced research and development facilities capable of producing measurably secure and specialized microelectronic for defense and intelligence purposes. This funding may go to primarily commercial facilities capable of producing secure microelectronics.

R&D Funding: Authorizes $5 billion in R&D spending to secure U.S. leadership in microelectronics. Requires agencies that receive this funding to develop policies to require domestic production, to the extent possible, for any intellectual property resulting from microelectronics research and development as a result of these funds. The new R&D funding would be broken up as follows:

  • $2 billion for DARPA’s Electronics Resurgence Initiative
  • $1.5 billion for the National Science Foundation
  • $1.25 billion for the Department of Energy
  • $250 million for the National Institute of Standards and Technology

National Microelectronics Research Plan: Establishes a subcommittee of the President’s Council on Science and Technology to produce a report each year to guide and coordinate funding for breakthroughs in next-generation microelectronics research and technology, strengthen the domestic microelectronics workforce, and encourage collaboration between government, industry, and academia.

Safeguards: Prohibits firms owned, controlled or otherwise influence by the Chinese government from accessing funds provided by the legislation.

“Senator Schumer’s American Foundries Act is the type of innovative, bipartisan legislation that we need to build on our regional strengths and grow the Hudson Valley economy post-pandemic,” said Mike Oates, President and CEO of Hudson Valley Economic Development Corporation. “With industry leaders like IBM, GlobalFoundaries, and soon ON Semiconductor right here in the Hudson Valley, it is no secret that investing in the microelectronics manufacturing and research and development space will enhance our ability to manufacture semiconductor chips, create jobs, and reimage our economy.”

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