HENRICO COUNTY, Va. — The U.S. government recently passed the CHIPS and Science Act, which includes a $52 billion boost to the nation's semiconductor industry, which manufactures the diminutive chips that power everything from smartphones to computers to automobiles.
The bill could have a big impact in Central Virginia.
Shawn Hays, the general manager at MA's Colonial Chevrolet, called the semiconductor the most important thing in a vehicle other than the wheels and engine. He said the average car contained about 1,500 semiconductors, also known as chips.
"From the engine to this dashboard to the screens," he said.
The majority of chip production has shifted overseas as U-S production dropped from 38 percent to 12 percent since 1990.
During the COVID-19 pandemic, low production combined with supply chain issues to hurt industries that use chips.
For Hays, that meant a lack of new cars and a switch to a used-car focus.
"When you don't have new cars, you have to get used cars. And when we go to buy used cars, if there's no new ones to replace the use when it drives, it's the old supply and demand," he said.
Now, with the CHIPs Act, the hope is to reverse course by investing billions into the field, including $39 billion in incentives for new or expanded manufacturing.
"It's a big investment, I hope it really spurs a lot more innovation," Jeff Smith, Chair of the Supply Chain Management Analytics Department at Virginia Commonwealth University, said.
Smith said while it made sense to outsource production, the U-S needed to be critical of what it does.
"To mitigate the global risk. And that's risk of security, its risk of supply," he said.
Key sponsors of the bill, including U.S. Senator Mark Warner (D - Virginia), hope it will create at least 12 new facilities.
U.S. Senator Tim Kaine (D - Virginia) said Virginia could be among the states that get a semiconductor facility.
"Every state wants a part of this. The states that already have chip manufacturing are going to be in the front and Virginia does," he said.
A Micron facility is already up and running in Northern Virginia.
Henrico County's White Oak Technology Center is the site of a former plant that employed over 3,000 people before shutting down over 10 years ago.
County leaders said they're working with lawmakers to position themselves for a reboot.
"We've got the sites, we have the infrastructure, we have the tech park, we have a workforce that is incredibly talented," Henrico County Manager John Vithoulkas said.
Smith said Virginia would likely need to invest more money into potential projects as the industry is an expensive one with constant development.
"You're going to have to consistently reinvest in those systems to stay at the front end of the advanced technology," he said.
Hays said it would take time for those plants to boost production and his industry is likely a year out from pre-pandemic levels. Still, he was excited at the prospect not only for his line of work, but for bringing jobs back to the U-S.
"I'm just looking forward to the point where we get back to normal," he said.
The Virginia Economic Development Partnership (VEDP) added it was working with the administration of Gov. Glenn Youngkin to attract semiconductor plants to Virginia.
"The Commonwealth has a leading semiconductor manufacturer, Micron Technology, Inc. located in Manassas, VA, and VEDP assisted with a significant capacity expansion in the Commonwealth in 2018. Virginia is well-positioned to expand semiconductor manufacturing with world-class infrastructure, a top-tier workforce, and excellent schools to prepare the workers of tomorrow," said VEDP President and CEo Jason El Koubi in a statement. "Under Governor Youngkin’s leadership, Virginia has landed two new Fortune 500 headquarters, Boeing and Raytheon, as well as the North American manufacturing operations for the LEGO Group with the support of the Virginia General Assembly. Businesses are growing in Virginia, and we are investing in sites and site readiness and preparing a talent pipeline to successfully compete for additional manufacturing and semiconductor businesses for the Commonwealth."
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