High-Tech Manufacturing Could Expand in Wisconsin, but Without Support from Outsourcing Advocate Ron Johnson

Republican senator opposed the CHIPS Act, even though it brings the potential for high-paying jobs and reduces the supply chain bottleneck hitting consumers.

President Biden visited Ohio on Friday for the groundbreaking of a semiconductor plant—the kind of ceremony that Wisconsin business advocates say has been made more likely by passage of the CHIPS Act. The new law that fixes a major supply chain gap and makes the US less reliant on China for high-tech components passed Congress six weeks ago on a broad bipartisan vote. But it was opposed by Sen. Ron Johnson, who blamed American manufacturers for their plight during a speech in the Fox Valley two weeks ago.

“The industrial Midwest is back,” Biden said. “The future of the chip industry is going to be made in America.”

Intel Corp moved ahead with the $20 billion facility as it appeared Congress was poised to pass the measure, which provides tax cuts and subsidies to encourage semiconductor firms to locate research, development, and production in the US. At one point, the US made 40% of the world’s chips that are used in cell phones, cars, appliances, computers, and more. That figure is now around 12%, making US consumers vulnerable to supply chain gaps or worsening relations with China.

Sen. Ron Johnson, a frequent advocate of outsourcing—who once said, “Let the billions of people around the world do that and provide us these goods—high quality, dirt cheap”—criticized American manufacturers that rely on chips supplied from overseas. 

“I would largely blame the big users of semiconductors because they have allowed this supplier to produce chips in a geopolitically unstable way,” Johnson told the Fox West Chamber of Commerce on August 31. “That’s really on US businesses, car manufacturers, that kind of stuff. What would have happened without the CHIPS bill is, you know Germany is going to start producing, I think that’s a pretty stable place, we could get the chips there.”

Germany is located 500 miles away from Ukraine, and the European economy is suffering the effects of Russia’s invasion.

The incentives in the CHIPS Act are designed to be spread across the country, with civic and business leaders around Madison envisioning Wisconsin as one of those regional technology hubs that can attract something similar to what Biden saw in Ohio.

Madison Chamber of Commerce president Zach Brandon recently told WMTV (NBC 15) about how the University of Wisconsin’s research facilities can attract companies that could then decide to do their manufacturing nearby.

“We think about Silicon Valley as sort of the dominant place of innovation,” Brandon said. “What this legislation does and what this investment does is creates the opportunity for the heartland of the country, the middle part of the country to become those places of innovation so that we remain globally competitive.” 

“Wisconsin could again find itself on a short list for landing a chipmaking facility,” said Tom Still of the Wisconsin Technology Council.

Rural Wisconsin can also benefit from the CHIPS Act through a $1 billion economic development program in the new law that targets distressed communities in need of transitioning their economy or making improvements such as expanded broadband service that can attract new job development.

Democratic Sen. Tammy Baldwin served on the conference committee that worked out differences between the House and Senate versions of the bill. 

“To me, it’s simple,” Baldwin said in a July statement, “We need Made in America chips to better support our Made in Wisconsin manufacturing economy.”

Writing for WisOpinion, former Wisconsin State Journal columnist Bill Kaplan noted that two dozen House Republicans supported the bill, along with 17 Republican senators—Republican leader Mitch McConnell among them. Kaplan noted that all of the state’s congressional Republicans voted no, most likely to avoid showing any support for the Democratic president even if it’s good for business.

“Johnson, defying logic, said the CHIPS bill would fuel the flames of inflation,” Kaplan wrote. “The so-called businessman senator does not apparently grasp the law of supply and demand. Most of our chips are made in Asia. Supply chain shortages of chips shut down US manufacturing of cars, leading to price increases. Same for other products made in America. Baldwin, unlike Johnson, understands pocketbook issues.”