Opinion: Governors Begging Congress for Semiconductor Cash Won't Fix Anything

There’s an initiative to convince Congress to pass legislation that would pour billions of dollars onto chip manufacturers at play that’s being led by Michigan Governor Gretchen Whitmer. A letter, signed by nine other governors, was issued asking like-minded lawmakers to send $52 billion in economic aid so that the chip shortage so that the supply issues that have been plaguing various industries (including the automotive sector) can finally be resolved.

Backed by the U.S. Semiconductor Industry Association (SIA), the “CHIPS for America Act” is just one of several programs designed to use the National Defense Authorization Act to create federal funding for chip suppliers. The governors (all of which are from states manufacturing automobiles) say they want a cash injection by the end of 2021 so that domestic chip manufacturing can build new factories right away. But SIA lobbyists are pressing for numerous plans that would result in extensive tax breaks and annual investments from the government that is all focused around the proposed CHIPS legislation and piggybacks on the recently passed U.S. Innovation and Competition Act (USICA).

Alright, let’s break this down.

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Chip Shortage: Subaru Shutting Down SIA Through April

Today’s update on the global semiconductor shortage involves Subaru, which recently announced that it would be suspending production at its plant in Indiana. Lafayette’s Subaru of Indiana Automotive (SIA) will be idled through the end of April while the automaker waits for suppliers to catch up. It’s a situation we’ve seen numerous manufacturers forced into this year, with Ford arguably being the most relevant for the North American market.

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Subaru Announces $140 Million Investment to Ensure Ascent Production

Subaru says it will invest $140 million into its production facility in Lafayette, Indiana, to ensure assembly of the 2019 Ascent goes off without a hitch. The cash will go toward helping the automaker meet the growing demand for SUVs in North America and provide 200 additional jobs for the region.

Subaru of Indiana Automotive (SIA) currently produces the Impreza, Legacy, and Outback. But it’s scheduled to add the Ascent early next year. The investment covers a factory expansion, new equipment, and tooling to support higher production volume.

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Subaru to Build Three-Row Crossover in Indiana

The Tribeca having driven into the sunset, Subaru will build its replacement in Lafayette, Ind. beginning in 2018 as its fourth model assembled in the U.S.

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