Earlier this week the U.S. Innovation and Competition Act passed in the Senate and Arizona leaders say that if this bill becomes law, it will have a decades-long impact on the state.
The $250 billion plan is broadly aimed at ensuring the United States remains competitive with China in the coming years and it also includes new funding to revamp the National Science Foundation.
USICA, which is still awaiting a House vote, includes $52 billion for semiconductor manufacturing in the states under the CHIPS Act which was folded into the larger legislation.
The USICA passed the Senate on Tuesday in a 68–32 vote including members from both political parties. Arizona Sens. Mark Kelly and Kyrsten Sinema both voted in favor of the bill.
Kelly told the Business Journal that the funding represented an incredible opportunity for Arizona and that getting it passed was among his top priorities when he got to Congress earlier this year.
“We have wound up in the position we never thought we would be in,” Kelly said. “We used to have 40% of the market on semiconductors. And today that number is 12%. And if it gets below 10%, we’re gonna have a very hard time keeping some companies in the United States because they’re not going to have the supply chain and the chips they need.”
Kelly, a former Navy pilot and NASA astronaut, described how having the fastest processors would be vital for everything from military applications to car production and that producing chips domestically is critical for national security.
Likewise, Sinema said the bill would help support job creation.
“Two of my most important jobs are keeping America safe and secure and supporting Arizona job creation. Today’s bipartisan Senate passage of our critical legislation will help create jobs across Arizona, strengthen our national security, and ensure our country continues to lead the world in innovation,” she said in a Tuesday statement.
Several other Arizona leaders voiced their approval of the bill passing this week: Phoenix Mayor Kate Gallego, Chandler Mayor Kevin Hartke, Intel CEO Pat Gelsinger and Arizona Commerce Authority president and CEO Sandra Watson all issued statements supporting the USICA passage.
Billions with a B
The $52 billion CHIPS Act portion of the USICA includes $39 billion in incentives for legacy chip production over five years and $2 billion for the R&D on chips at the Department of Defense.
Chandler has been a home to Intel since 1980 and in March the California-based chipmaker said it would spend $20 billion to build two new factories (called fabs) at the company’s existing site.
Taiwan Semiconductor Manufacturing Company, the largest chipmaker in the world, has recently started construction of its first US-built fab in Phoenix. The TSMC investment, which may be worth more than $30 billion, is expected to reshape the economic landscape of the city.
It’s impossible to say exactly how much money might flow to Arizona through the USICA and its component CHIPS Act, but given the presence of so many chipmakers in the state (including Microchip Technology, ON Semiconductor, NXP and more) the sum will likely be counted in the billions.
Funding for universities
The CHIPS Act also includes $10.5 billion to establish a National Semiconductor Technology Center, National Advanced Packaging Manufacturing Program, and other R&D programs.
In a previous March interview with the Business Journal, Arizona State University President Michael Crow said that the university was already talking with Stanford University in hopes of partnering to secure funding for one of these research centers.
Fred DuVal, a member of the Arizona Board of Regents which oversees the state’s public universities, described the passage of the USICA in the Senate as transformative for the state.
“There will be no state that will be as positively impacted as Arizona by the passage of this legislation,” DuVal said in an interview. “Folks will sort of look back at the early 2020s, as the pivot where we moved from being good to being great in this arena.”
He said that the state’s three public universities — ASU, University of Arizona and Northern Arizona University — are uniquely positioned to seize on the funding opportunity because of the collective expertise in space exploration.
Within the USICA, there is specific funding carved out for Arizona’s Space Grant Consortium, which includes the three public universities and Embry-Riddle Aeronautical University in Prescott. UArizona would also get funding for its Near Earth Objects Surveillance Mission and DuVal said that the state’s researchers will be in a good position for other competitive funding.
DuVal was enthusiastic about the opportunity envisioned in the bill, but he called on U.S. House members to make sure the bill makes it to President Biden’s desk, who has already endorsed the legislation.
“This is about Arizona’s ability to have a growing economy for future generations and this one isn’t about politics,” he said. “This is about representing what’s in the best interest of our state and I hope they can get it done.”