Congress Passes CHIPS Act, Flathead Manufacturing Benefits Expected

August 8, 2022

Montana Economy

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President Joe Biden is about to sign into law the CHIPS and Science Act, a $280 billion piece of legislation recently passed by Congress and designed to strengthen the U.S. semiconductor industry and increase the country’s competitive advantage in China. The legislation is a welcome development for Flathead Valley, where Applied Materials, one of the nation’s largest semiconductor makers, operates 350,000 square feet of engineering and manufacturing space in Kalispell.

Applied Materials has been operating in the Flathead since 2009, when it acquired Kalispell-based semiconductor producer Semitool for $364 million, taking over its facilities off West Reserve Drive. Since then, its operations in the area have grown significantly, making it one of Flathead’s largest employers. In addition to the West Reserve Drive site, the company moved to the old Shopko building in Evergreen earlier this year, creating 200 new jobs in manufacturing, engineering and business administration. Today, Applied Materials employs 825 people in Flathead.

The semiconductor maker stands to benefit from recently passed legislation that offers $54 billion in grants for semiconductor manufacturing and research, tens of billions in funding for regional tech hubs and a tax credit that will cover 25% of investment in semiconductor manufacturing through 2026. Congressional architects of the act said passage of CHIPS will result in 300,000 well-paying jobs across the country, as well as significant progress towards a competitive advantage over the Chinese semiconductor industry.

“At a time when semiconductor leadership is more important than ever to the economy,” said Gary Dickerson, president and CEO of Applied Materials, “this crucial legislation will strengthen manufacturing and chip innovation, create jobs and strengthen the semiconductor supply chain in Montana and the United States. states.”

The CHIPS Act has won broad bipartisan support, a notable feat in a Congress that has been largely unable to overcome partisan gridlock in recent months. The Senate passed the bill 64 to 33 and the House, 243 to 187.

Montana Sen. Jon Tester, D-Mont., and Sen. Steve Daines, R-Mont., voted in favor of CHIPS.

“I fought for this bill to reverse the trend of outsourcing critical manufacturing to foreign countries and instead invest in rural America by stimulating high-tech production at home, strengthening supply chains supply and increasing domestic research and development,” Tester said in a statement. Release.

Daines released a statement echoing similar sentiments. “Investing in U.S. semiconductor production, innovation, STEM education, and R&D is critical to bolstering our national security, strengthening America’s position as a global leader, and winning the race against China.” , said the senator.

Rep. Matt Rosendale was in the minority to vote against the bill. On July 28, Rosendale retweeted a statement from the House Freedom Caucus, a conservative Republican congressional caucus, stating that CHIPS “not only adds $79 billion to the deficit, but is also loaded with crony capitalist papers, climate initiatives from the Green New Deal and Radicals’ woke politicians Worse still, its passage (sic) in the Senate – with the help of 17 Senate Republicans – opened the door to even more runaway spending in the Democrats’ reconciliation deal with $400 billion in spending on Liberal priorities and some $700 billion in tax hikes.

As the United States continues to struggle with a severe shortage of semiconductors, Montana lawmakers hope the CHIPS Act will boost manufacturing across the state, moving supply chains forward while strengthening the national economy. and local.