Michigan governor says microchip bill could turn state into auto chip hub

Following the passage of the semiconductor bill by Congress last week, Gov. Gretchen Whitmer said Michigan hopes to become a hub for microchip manufacturers that supply the auto industry.

Whitmer, in an interview Monday with Automotive News, said the state's "high concentration" of engineers and its automotive supply chain should make it an attractive option for chip manufacturers determining where to build factories in the U.S.

"This is an important opportunity for us to show the world that we can lead," the first-term Democratic governor said. "Michigan has a unique set of strengths."

Both houses of Congress last week passed the CHIPS and Science Act, which includes $52 billion for U.S. chip manufacturers and tax credits designed to spur more domestic production of semiconductors. President Joe Biden is expected to sign the bill into law.

Of that funding, $2 billion is designated for production of older, "mature node" semiconductors used by the auto industry. Global auto manufacturing has been rattled by a shortage of those chips, with more than 13 million vehicles removed from automakers' production schedules since the start of 2021, according to an estimate by AutoForecast Solutions.

"If you're driving around Michigan and drive past some of these lots with beautiful, brand-new cars that are sitting there waiting for chips, it's a powerful reminder that we've got to bring this advanced manufacturing back to our country," Whitmer said.

She said Michigan is taking a "whole-of-government approach" to attracting chip manufacturers, including by investing in infrastructure and education.

The state wants "to make sure that an auto chip manufacturer would see that Michigan is a phenomenal place to build out a fab and start producing these chips," Whitmer said. "We've got an environment that is hungry."

Whitmer said she has spoken with leadership at General Motors and Ford Motor Co. about the chips bill, saying executives were "thrilled" to see it passed.

"EVs require a heck of a lot more chips" than internal combustion engine vehicles, she said. "This is a crucial component of this transition that we're looking to make."

Whitmer said it would be crucial for congressional Democrats to sort through details on the extension of federal tax credits for electric vehicles. A Senate proposal by Democrats Chuck Schumer and Joe Manchin includes the extension of the $7,500 tax credit for EV consumers but adds stringent critical mineral and battery sourcing requirements for automakers, among other rules.

Whitmer said she has spoken with U.S. Rep. Debbie Dingell, D-Mich., about the proposal. Whitmer said Dingell is aware of concerns domestic automakers have with some of the bill's language and that Dingell is working with Manchin and others in Congress on the proposal.

"The spirit of it is something that is important and that we support, but we have to make sure we get it right so that we can support this transition and American jobs," Whitmer said.

Automakers and industry trade groups told Automotive News last week that they were reviewing the bill's language. In a statement Thursday, GM said it was looking forward to working with Congress on provisions "that would ensure a level playing field for all OEMs, incentivize consumer adoption of future electrified options and ensure the U.S. continues to be a leader on EV innovation and adoption."

Daniel Ryan, Mazda North American Operations' vice president of government and public affairs, said the automaker was concerned that the battery and critical minerals provisions could make it "very difficult" for automakers to reach EV sales targets set by the federal government.

Audrey LaForest contributed to this report.