By David Shepardson
WASHINGTON (Reuters) -The chief executives of Intel (NASDAQ:INTC) and Micron will testify on March 23 before the U.S. Senate Commerce Committee as the industry and lawmakers make the case for $52 billion in U.S. subsidies for semiconductor chips manufacturing.
The chief executive of truckmaker Paccar (NASDAQ:PCAR) Inc will also testify at the hearing, which will look at vulnerabilities in semiconductor supply chains and the sector's connection with American competitiveness.
Senate Commerce Committee Chair Maria Cantwell announced the https://www.commerce.senate.gov/2022/3/developing-next-generation-technology-for-innovation hearing on Wednesday. Reuters reported the planned hearing earlier.
Two decades ago, the United States produced nearly 40% of all chips and today it accounts for only 12% of global production, Commerce Secretary Gina Raimondo has said.
Last week, President Joe Biden met with executives of chipmakers including Samsung Electronics (OTC:SSNLF) Co Ltd, Micron Technology Inc (NASDAQ:MU) and other companies as part of an effort to push the U.S. Congress to fund subsidies to chipmakers to ease the semiconductor crunch.
The Senate in June and the House in February approved the $52 billion in subsidies in separate bills. "Get it to my desk as quickly as you can," Biden said last week.
The bills take different approaches to addressing U.S. competitiveness with China on a wide range of issues, as well on trade and some climate provisions.
A persistent industry-wide shortage of chips has disrupted production in the automotive and electronics industries, forcing some firms to scale back production.
Cantwell said it was urgent to act, noting the chip shortage cost the global auto industry an estimated $210 billion in revenue in 2021 and a loss of production of 7.7 million cars.
"It's 30% to 50% cheaper to build a semiconductor foundry in Asia than in the United States, mostly because of foreign government investment... We can't wait," she said.
Intel said it was pleased to have the opportunity to "advocate for the importance of investing in American semiconductor leadership."
In January, Intel said it would invest up to $100 billion to build potentially the world's largest chip-making complex in Ohio.
Micron said in October it plans to spend $150 billion over the next decade globally on leading-edge memory chips manufacturing and research and development. Micron said funding from Congress "would open the door to new industry investments."
SEMI, an industry association, said in a letter https://www.semi.org/sites/semi.org/files/2022-03/SEMI_House_FABS_Act_Support_Letter_Mar_16.pdf to Congress that chips funding "is vital to provide a foundational incentive for investments in domestic design and manufacturing facilities for semiconductors and semiconductor equipment."
Critics like Senator Bernie Sanders question why Congress would give subsidies to a large profitable industry.