Congress Passes CHIPS Act, Benefits for Flathead Manufacturing Expected


President Joe Biden is set to sign into law the CHIPS and Science Act, a $280 billion piece of legislation recently passed by Congress that is designed to bolster the American semiconductor industry and increase the country’s competitive edge over China. The legislation is a welcome development for the Flathead Valley, where Applied Materials, one of the country’s largest semiconductor manufacturers, operates 350,000 square feet of engineering and manufacturing space in Kalispell.

Applied Materials has conducted business in the Flathead since 2009, when it acquired Kalispell-based semiconductor producer Semitool for $364 million, taking over its facility off of West Reserve Drive. Since then, its business in the area has expanded significantly, making it one of the Flathead’s largest employers. In addition to the West Reserve Drive site, the company moved into the former Shopko building in Evergreen earlier this year, adding 200 new jobs in manufacturing, engineering and business administration. Today, Applied Materials employs 825 people in the Flathead.

The semiconductor producer is slated to benefit from the recently passed legislation, which offers $54 billion in grants for semiconductor manufacturing and research, tens of billions in regional technology hub funding and a tax credit that will cover 25% of investments in semiconductor manufacturing through 2026. Congressional architects of the act have said the passage of CHIPS will give way to 300,000 well-paying jobs across the country, as well as meaningful strides towards a competitive edge over China’s successful semiconductor industry.

“At a time when semiconductor leadership is more important than ever to the economy,” Applied Materials President and CEO Gary Dickerson said, “this critical legislation will bolster chip manufacturing and innovation, create jobs and strengthen the semiconductor supply chain in Montana and the United States.”

The CHIPS Act achieved broad bipartisan support, a notable feat in a Congress that has been largely unable to overcome partisan gridlock in recent months. The Senate passed the bill 64 to 33 and the House, 243 to 187.

Both Montana Sen. Jon Tester, D-Mont., and Sen. Steve Daines, R-Mont., voted in favor of CHIPS.

“I fought hard to ensure this bill reverses the trend of outsourcing critical manufacturing to foreign countries and instead invests in rural America by boosting high-tech production at home, strengthening supply chains, and increasing domestic research and development,” Tester said in a press release.

Daines released a statement echoing similar sentiments. “Investing in American semiconductor production, innovation, STEM education and R&D is essential to strengthening our national security, reinforcing the United States’ position as a global leader and winning the race against China,” the senator said.

Rep. Matt Rosendale was among the minority to vote against the bill. On July 28, Rosendale retweeted a statement from the House Freedom Caucus, a conservative Republican congressional caucus, stating that CHIPS “not only adds $79 billion to the deficit, but also is loaded crony capitalist handouts, Green New Deal climate initiatives, and radical’ woke’ policies. Worse still, it’s (sic) passage in the Senate — with the help of 17 Senate Republicans — has opened the door for even more out-of-control spending in the Democrats reconciliation deal with $400 billion in spending for liberal priorities and some $700 billion in tax increases.”

As the United States continues to battle an encumbering semiconductor shortage, Montana’s legislators are hopeful that the CHIPS Act will spark manufacturing throughout the state, moving supply chains forward while bolstering the national and local economy.

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