Elgin Area Chamber Of Commerce: Coalition Urges Chip Factory Tax Credit, Home Sales Rise, EV Batteries Keep Ship Burning

Press release from the Elgin Area Chamber of Commerce:

February 23, 2022

Coalition Urges Chip Factory Tax Credit

A business coalition is urging Congress to move forward on a tax credit for investment in building semiconductor factories in the U.S.

The group consisting of The Business Roundtable and industry associations as well as labor unions wants Congress to pass the Facilitating American-Built Semiconductors, or FABS, Act, which includes a tax credit of up to 25% for computer chip manufacturing and design.

In a letter last week to congressional leaders, the coalition also urged Congress to quickly reconcile differences between Senate and House versions of the separate CHIPS Act, legislation that would provide grants for chip production. The group wants both to cover the full range of production.

A bipartisan group of senators introduced the FABS Act last June. It was part of President Biden’s Build Back Better legislation that failed in the Senate.

Passing the FABS Act would “ensure long term success in semiconductor manufacturing and design in the U.S. by incentivizing investment in new, expanded, and upgraded” semiconductor fabrication plants, equipment production facilities and chip design, according to the letter.

Intel Corp., Texas Instruments, Samsung and Taiwan Semiconductor Manufacturing Co. are building chip plants in the U.S. When Intel announced in January it would build two plants in Ohio, the company said its plans likely would expand from a $20 billion investment to $100 billion if the CHIPS Act passed.

Home Sales Rise

Existing home sales rose in January and prices rose at an accelerated pace due to the rise in interest rates.

The National Association of Realtors reported Friday that the annual rate of sales increased 6.7% from December, 45% of which were in the South. Sales in January were 2.3% lower than January 2021.

"Buyers were likely anticipating further rate increases and locking-in at the low rates, and investors added to overall demand with all-cash offers," Lawrence Yun, NAR's chief economist, said in a statement. "Consequently, housing prices continue to move solidly higher."

According to the organization’s Realtors confidence survey index, 22% of the sales went to investors, up from 15% a year ago. And 27% were cash sales, 8 percentage points higher than a year ago.

The median sales price was $350,300, 15.4% higher than a year ago and the third consecutive month of escalating prices. Prices rose at a torrid pace in first part of last year before slowing into September and October.

EV Batteries Keep Ship Burning

A burning freighter in the middle of the Atlantic Ocean may signal a big challenge for the supply chain transporting electric vehicles.

The Felicity Ace, carrying about 4,000 luxury vehicles, caught fire last Wednesday. Electric versions of Porches and Audis were among the Volkswagen brands on the ship headed to the U.S.

Those EVs equipped with lithium-ion batteries may have further stoked the fire and complicated extinguishing it, according to various media reports.

Joao Mendes Cabecas, captain of the nearest port in the Azores, told Reuters over the weekend that the EVs were keeping the fire alive. Eventually, the fire had subsided by the end of the weekend.

Source: www.CoStar.com

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.