NY may benefit from push to increase domestic microchip production

WASHINGTON — New York could emerge as a national leader in the development and production of microchips as a federal push to increase domestic production of computer chips looks to the state’s existing technololgy infrastructure, including Long Island’s Brookhaven National Laboratory.

A bipartisan panel of lawmakers is negotiating the details of a $52 billion package aimed at ramping up U.S. production of semiconductor chips, which are used to operate cars, household appliances, cellphones and satellites.

The White House has been pressing Congress to act quickly to pass a bill it has dubbed the Bipartisan Innovation Act amid a global shortage of computer chips spurred by the pandemic. The shortage of chips, largely made overseas in China and other Asian countries, has led to the production slowdown of other American-made products, including cars.

Senate Majority Leader Chuck Schumer (D- N.Y), who shepherded the passage of the Senate’s version of the bill known as the U.S. Innovation and Competition Act last June, is pushing for the inclusion of $17 billion for the Department of Energy to focus on energy supply chain issues, such as those that have hampered the domestic production of chips.

Schumer’s office said Brookhaven National Laboratory in Upton would be eligible for the funds, and could eventually play a key role if New York is selected as the site of a national center focused on the research and development of semiconductor chips.

Angelo Roefaro, a spokesman for Schumer, told Newsday the lab at Brookhaven is part of a consortium of state and national stakeholders advocating for New York to be selected as the site for a “National Semiconductor Technology Center” that would be created under the $52 billion package.

The Brookhaven National Lab “could be a key research partner in the [technology center] to advance the nation’s competitiveness in cutting-edge chips,” Roefaro said.

Schumer has been pushing Biden administration officials to consider Albany’s NanoTech Complex as the site for the national research center should the package pass. In January he toured the sprawling complex with Deputy Commerce Secretary Don Graves and pitched the site for consideration.

Commerce Secretary Gina Raimondo, speaking to reporters last week about the push to reach a compromise bill, noted that the NanoTech Complex, and the current expansion of semiconductor chip companies in upstate, makes New York “especially well suited to benefit” from the passage of a sweeping chip bill.

“Your region stands to benefit disproportionately,” Raimondo said in a call with reporters from New York and New Jersey.

New York is home to 88 semiconductor companies that employ more than 34,000 workers, according to figures compiled by Schumer’s office.

Richard Reeder, vice president for research at Stony Brook University, who was among more than 40 academics and tech business leaders who signed a letter in January calling on New York’s congressional delegation to support the innovation package, said the federal funding would provide a boost to the state.

“New York companies and leading research universities, including Stony Brook University, would play essential roles in advancing new technologies, boosting New York's regional economy, creating jobs, and supporting workforce development,” Reeder said in an e-mail to Newsday.

Raimondo urged the bipartisan panel of House and Senate lawmakers to “work as hard and as fast as possible” to deliver a bill that Congress could pass and be signed into law by President Joe Biden.

The House passed its version of the bill, known as the America Competes Act in February, but now it’s up to the recently formed bipartisan panel to reconcile the differences between the House and Senate version. The negotiations are being conducted as the window to pass legislation ahead of the midterm elections narrows.

Raimondo noted that the U.S. is competing with other countries including Germany, France, Spain and China who are “wooing” companies with multibillion dollar incentives to set up shop in their countries.

“What we've heard from these companies is that if Congress doesn't quickly pass this act and provide that certainty, then those companies are going to have no other choice but to expand their facilities in those other countries,” Raimondo said.

Biden, speaking at an event in Greensboro, North Carolina, earlier this month, called on Congress to get a bill passed “as quickly as possible,” adding that “our economic strength is on the line and national security, as well, is on the line.”

“Other countries are racing ahead, but we can’t afford to wait,” Biden said.

Tarun Chhabra, a special assistant to Biden and a senior director on the president’s National Security Council, told reporters in a recent call that the “current U.S. dependence on a limited number of overseas production facilities to produce” the vast majority of chips poses “a profound national security risk.” Chhabra said international “supply chain disruptions would significantly degrade key U.S. defense capabilities that depend on these chips.”

While the House and Senate bills have passed with bipartisan support, some Republicans have raised reservations about passing a massive spending bill, arguing it amounts to a “handout” to an already profitable industry.

Sen. Rick Scott (R-Fla.) during a March Senate hearing on the issue of chip shortages, told industry leaders in attendance: “You guys want us to spend $52 billion, but nobody comes back and says, ‘okay for $52 billion, the taxpayers of the country will get a certain dollar back.”

Intel chief executive Patrick Gelsinger, responding in part to Scott’s remarks, said the investment would generate jobs and revenue for states. “It’s also about returning this industry from Asia to American soil,” Gelsinger said.

By Laura Figueroa Hernandez

laura.figueroa@newsday.com@Laura_Figueroa

Laura Figueroa Hernandez is the White House correspondent and previously covered New York City politics and government. She joined Newsday in 2012 after covering state and local politics for The Miami Herald.