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Apr 14, 2022   |  

Billings Gazette: Tech in the Mountain West crucial to microchip expansion, Commerce Sec. Raimondo says

By: Tom Lutey

Calling the United States dangerously short on microchips and overly reliant on foreign suppliers, U.S. Commerce Secretary Gina Raimondo on Wednesday advocated for a manufacturing expansion bill beneficial to the tech economy of the Rocky Mountain West, including Montana.

In a press call with reporters from Montana, Idaho, Utah and Washington, Raimondo said the chip shortage is as bad as it's ever been, posing a threat to the manufacture of military equipment, farm machinery and automobiles. The only way out, the secretary said, is expanding U.S. production of microchips, or semiconductors.

Congress is currently reconciling two bills getting at the same chip problem. Both the House and the Senate passed versions in recent weeks. Included is $52 billion directed to the Department of Commerce for fostering semiconductor production in the United States.

"The semiconductor shortage is really at a crisis level. A couple of years ago, the median inventory of semiconductors in the United States was about 40 days. Today, it's fewer than five days," Raimondo said. "Even more alarmingly, 90% of the world's most sophisticated chips are made in Taiwan, actually a single company in Taiwan. It is those chips that we need for military equipment, artificial intelligence, quantum computing, communication devices, and they're almost all made in Taiwan. Our extreme dependence on other countries for semiconductors means that we're very vulnerable."

Significant to Montana is support for silane gas production. The world's largest supplier of the gas, used in semiconductors, flat screen monitors and solar panels, is a factory on the outskirts of Butte. REC Silicon employs nearly 300 people at the facility, according to the company's website. REC has been on the White House's radar as early as the second quarter of 2021 when in its 100-day supply chain review the Biden administration recognized the potential for domestic expansion of silane gas production, but noted that trade moves by China had hobbled the industry. Three other manufacturers in the United States were also identified at that time.

"Since 2014, China has spent about $150 billion subsidizing their chip companies. And so, what we are saying is, we have to level the playing field," Raimondo said. "So our companies can compete, some of that is trade remedies, but a lot of that is making these investments. The $52 billion in the Chips Act, which we need Congress to pass, gives our companies a fighting chance against what China is doing."

Semiconductors are a primary driver of silane gas demand, but so are next-generation batteries using silicon anodes.

In a roundtable discussion with Energy Secretary Jennifer Granholm last June, REC Silicon Vice President Chuck Sutton said the United States had the ingredients to be a leading developer and manufacturer of lithium batteries, but that government support was needed. Otherwise, the batteries would go the way of solar panel production, now dominated by China, which heavily subsidized its industry. In the discussion, reported by Energy Storage News, Sutton said the value chain couldn't grow fast enough on its own. He said REC supported cost-sharing grants to produce the silane gas and three other ingredients essential to producing the batteries. More than loan guarantees were needed to stimulate manufacturing.

Montana's congressional delegation was mixed in its support for the innovation bills. Republican Rep. Matt Rosendale voted against the "America Competes Act" in the House, but in the Senate both Republican Steve Daines and Democrat Jon Tester voted for a similar bill. They framed the bill as crucial for keeping the United States competitive with China. Daines said his support for the legislation extended only to the provisions in the Senate bill that were matched by the House version. He thought the House version went too far in scope and spending.

"We must keep the bi-partisan provisions to support semiconductor manufacturing, level the playing field for trade, increase IP protections for Americans, create high-paying tech jobs and advance research in states like Montana that are leading the quantum computing revolution," Daines said in a press release after the vote.

Tester was appointed April 7 to the conference committee to reconcile the differences between the House and Senate bills. When the committee post was announced, he said the United States needed to strengthen its supply chain if it was to remain the leader of the free world.

https://billingsgazette.com/news/tech-in-the-mountain-west-crucial-to-microchip-expansion-commerce-sec-raimondo-says/article_4ce57971-40f5-527c-a0f6-eccf87d8375c.html#tncms-source=login

Office Contact Information

Senator Tester's Montana staff serves the state from offices in Billings, Bozeman, Butte, Great Falls, Helena, Kalispell, and Missoula. Please bring your concerns with federal agencies, academy nominations, and other situations to one of these Montana offices.

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