One Year Later: Biden’s CHIPS Act Makes Michigan a ‘Global Epicenter’ for Manufacturing

With record-breaking federal investments made possible through the bipartisan CHIPS and Science Act, state officials said Michigan has emerged as a worldwide leader in advanced manufacturing—and more new jobs are still on the way.

LANSING—One year has passed since President Joe Biden signed the bipartisan CHIPS and Science Act into law. Since then, Michigan has seen record-breaking levels of investment in domestic manufacturing—specifically in the semiconductor and clean energy industries.

“We are continuing to demonstrate our leadership with more battery plants, semiconductor facilities, and innovative workforce programs,” Gov. Gretchen Whitmer said in a statement marking the one-year anniversary of the legislation on Wednesday. “Our know-how and deep industry roots put us in a strong position to be a global leader in so many emerging industries, backed by the powerful incentives in the bipartisan CHIPS and Science Act.”

The law—which was passed by Congress last summer—included $280 billion in funding, specifically to ramp up domestic semiconductor production and research. And it garnered immediate praise in Michigan as a big boon for the state’s automotive manufacturing industry, which has dealt with a spate of production issues tied to global chip shortages.  

The Basics 

You might have noticed that products like cars, cell phones, refrigerators, and gaming consoles were a bit harder to come by during the pandemic, namely as supply chain issues affected the availability of these products in the US and sent prices surging—especially for vehicles. 

Amid the manufacturing struggle, consumer prices climbed. Manufacturing plants in Michigan were also forced to shut down due to the chip shortages. These supply chain issues impacted hundreds of thousands of auto-related jobs nationwide—and delayed the production (and subsequent sale) of several million vehicles.

These shortages occurred because these items—as well as many other commercial products—rely on microchips that are overwhelmingly manufactured in Taiwan. 

Biden’s CHIPS and Science Act was designed to alleviate those supply chain woes and cut costs for consumers—namely by directing a whole lot of federal cash to help expand production, including about $39 billion in direct subsidies for private companies to expand in the US.

The federal spending plan also included extensive tax credits for new developments, about $13 billion for workforce training programs and research and development efforts, and about $2 billion that went toward “legacy chips,” the chip technology that’s used to assemble vehicles.

State and business leaders see the law as a way to build (and sell) more cars in Michigan and create more manufacturing jobs for Michiganders. And over the last year, Whitmer said, the legislation has paid some big dividends. 

READ MORE: What is the CHIPS Act and What Will it Do for Michigan?

‘Make it in Michigan’

Since the passage of the CHIPS and Science Act, several big-name companies have announced new investments (or increased previous ones) to boost domestic microchip manufacturing and create new jobs in Michigan. 

In June, state officials announced the creation of at least 115 new jobs in Bay City and Greenville—part of a new, $81 million expansion project from Mersen USA, a subsidiary of Le Carbone Lorraine in France, which specializes in semiconductors and chip manufacturing.

The company already employs 304 Michiganders at its two facilities—and due to increased demand, now plans to build out four new buildings across five acres at its Bay City location. The Greenville location is also set to add space (and capacity) to its main production facility. 

State officials said the company decided to expand in Michigan rather than a competing site in Tennessee, in part, because it received a $1 million state economic development grant and is set to receive tax abatements from the local governments of both Bay City and Greenville.

Whitmer added: “Michigan was chosen for these expansions over Tennessee because of our talented workforce and strength in the future of mobility and the semiconductor supply chain.”

In May, state officials also announced a new public-private partnership with the semiconductor company KLA, Belgium-based technology hub imec, the University of Michigan, Washtenaw Community College, and General Motors. The partnership will create a new semiconductor training center in Ann Arbor to further develop the state’s semiconductor workforce.

In March, California-based indie Semiconductor also announced that it was investing $12.5 million in Michigan and creating up to 180 jobs in Auburn Hills, where it plans to expand its office to include a semiconductor design and testing facility. And last fall, Hemlock also announced plans to invest $375 million and create another 170 jobs at its facilities in Thomas Township. 

Whitmer has also since assembled a Semiconductor Talent Action Team, which is designed to identify more ways to attract more, long-term, sustainable investments from around the world.

“Michigan’s legendary manufacturing heritage and bold investments in workforce and economic development have us in a strong position to build the future of cars, chips, and clean energy,” Whitmer said. “We will continue getting things done to help anyone ‘make it’ in Michigan.” 

READ MORE: Whitmer Reels in New Jobs as Companies Rush to ‘Make it in Michigan’

Generational Investments

With Michigan’s population growth still lagging behind many other states across the country, state lawmakers also earmarked hundreds of millions of dollars toward attracting new investments—including from both private businesses and the federal government.

The latest budget includes a $500 million deposit in the Make it in Michigan Fund and a $350 million for the Make it in Michigan Competitiveness Fund, both of which are designed to help Michigan secure federal funding that’s still available through the CHIPS and Science Act and the Inflation Reduction Act, as well as entice more private businesses to expand in Michigan.

Michigan now supplies about 20% of the semiconductor chips used across the American auto industry, making it a “global epicenter of advanced manufacturing,” officials said.

John Walsh, president of the Michigan Manufacturers Association, said the latest budget will only work to further expand the state’s business potential—and inevitably create more jobs.

“As we stand at the cusp of the most transformative time in the history of manufacturing, there is perhaps nothing more impactful to the future success and prosperity of Michigan and its citizens than a thriving manufacturing sector,” Walsh said in a statement after the budget was passed.

READ MORE: Here’s What’s In Michigan’s New Record-Setting State Budget

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