The US could lose its silicon wafer factory if the CHIPS Act is not funded

US Commerce Secretary Gina Raimondo told CNBC’s Jim Cramer on Monday that she believes GlobalWafers will go ahead with its plan to build a silicon wafer fab in Texas — but only if Congress approves funding for the CHIPS for America Act by the start of the August recess .

“This investment they are making is dependent on Congress passing the CHIPS Act [funding]. The CEO told me that herself, and they repeated that today,” Raimondo said in an interview with Mad Money.

“It has to be done before they go on August break. I don’t know how to put it more clearly. This deal…will go away I think if Congress doesn’t act,” she added.

GlobalWafers, a Taiwan-based semiconductor silicon wafer company, said Monday it plans to build a facility to manufacture the component in Sherman, Texas. The facility could create up to 1,500 jobs and produce 1.2 million wafers per month, according to the US Department of Commerce.

The CHIPS (Creating Helpful Incentives to Produce Semiconductors) for America Act creates incentives for investments in the US semiconductor industry. Although passed in January 2021, a funding package has not been approved by Congress.

The mess in the supply chain has kept a variety of industries, particularly the auto industry, from grabbing semiconductor chips while demand rises.

“Semiconductor demand will double in the next 10 or 11 years. It takes a couple of years to get a new facility up and running, which means these companies need to make their decisions now. GlobalWafer made the announcement today because they need to have the cement in the plant in the ground in November,” Raimondo said.

The Commerce Secretary, who previously lobbied Congress to support a more resilient American semiconductor industry that relies less on foreign suppliers, reiterated that time is of the essence.

“I think it’s about time people got a lot more hands-on. … Everyone must realize that you will not get everything you want. We need to boil this down to the essentials, get it through and act fast,” she said.

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