US unveils funding for chip industry firm in battleground Michigan

President Joe Biden's administration announced Monday hundreds of millions of dollars in funding for a semiconductor industry company in battleground Michigan, as the fight for swing states intensifies around two weeks before November's US election.

The latest $325 million in proposed funds under the CHIPS and Science Act -- a package of incentives to boost research and US semiconductor production -- goes towards polysilicon manufacturer Hemlock Semiconductor.

Hemlock is based in Saginaw County which Biden won by just 303 votes against Trump in the 2020 election.

It could be crucial again as Democratic candidate Vice President Kamala Harris pushes for victory in Michigan, with the overall presidential race still neck-and-neck.

Asked about the timing of the announcement, a senior US official maintained that this was purely related to commercial negotiations.

The decision also comes as the United States works to stay ahead in tech as competition with China ramps up.

"The US needs a reliable source of polysilicon, which is the most critical component and material in semiconductors," Secretary of Commerce Gina Raimondo told reporters Monday.

Hemlock, she added, is the only US-based manufacturer of hyper-pure polysilicon and one of just five companies in the world making polysilicon at the level needed for leading-edge semiconductors.

The planned funds will support the construction of a new manufacturing facility on Hemlock's existing Michigan campus, and the project is expected to create nearly 180 manufacturing jobs -- alongside more than 1,000 jobs in construction.

"We are on path to hit our goal of tripling domestic manufacturing capacity in this country," Raimondo added.

The proposed direct funding -- the first such announcement for Michigan -- came after initial concerns that key firms like Hemlock could be left out from CHIPS Act benefits due to restrictive definitions.

In late 2023, Michigan Governor Gretchen Whitmer urged Biden in a letter to ensure resources from the legislation could also benefit Michigan companies.

Whitmer told reporters Monday that supply chain problems in 2021, during the Covid-19 pandemic, underscored the negative effects of offshoring chip manufacturing.