08.11.22

SCHUMER: WITH NATIONAL MICROCHIP SHORTAGE IMPACTING WNY COMPANY, BAXTER INTERNATIONAL, SCHUMER LAUNCHES TWO-PRONGED PLAN TO GET COMPANY THE CHIPS IT NEEDS SO WORKERS CAN KEEP PUMPING OUT LIFESAVING MEDICAL TECH IN ORLEANS COUNTY

Semiconductor Chips Are Integral To Everyday Life -- From Cars & Refrigerators, To Lifesaving Medical Devices Like Those Made At Baxter International In Orleans County, But Global Supply Chain Crisis Impacting Medical Treatment, Weakens National Security, Increases Costs For Families, & Threatens Jobs

Schumer’s Bipartisan CHIPS & Science Bill Signed Into Law Earlier This Week and Will Provide Major Investment to Bring Microchip Manufacturing Back To The U.S. And Address Supply Chain Problems

Schumer: Get Orleans County’s Baxter The Chips It Needs So It Can Keep Pumping Out The Medical Devices We Need To Treat COVID-19 And Save Lives!

Standing with workers of Baxter International in Orleans County, U.S. Senate Majority Leader Charles E. Schumer today launched his two-pronged plan to address the microchip shortage that has hindered this facility in Medina from being able to continue to produce lifesaving medical equipment. Schumer explained that Baxter employs about 300 people in Medina to help make essential medical technology like infusion pumps that are used in the treatment of COVID-19 and other illnesses, but the ongoing supply chain crisis for semiconductors has bottlenecked production, threatening healthcare providers’ ability to obtain this lifesaving equipment. Schumer said that he is committed to breaking this logjam, and is launching a two-pronged plan to address the shortage Baxter is facing in both the short- and long-term.

First, Schumer explained that he is working with Texas Instruments (TI), one of the main suppliers of microchips for Baxter’s infusion pumps, to help prioritize essential medical treatment companies like Baxter that are a critical need for America’s pandemic response. Schumer said both he, and the U.S. Department of Health and Human Services (HHS), have reached out to Texas Instruments to help deliver the components for their medical devices as quickly as possible. Second, Schumer highlighted his historic CHIPS and Science Bill that was just signed into law this week, that will provide the federal incentives to bring chip manufacturing back to America and places in Upstate NY like the WNY STAMP site, helping address supply chain problems faced by Baxter and other companies in the long term.

“Orleans County’s Baxter International facility worked nonstop through the pandemic to get medical equipment out to the hospitals and frontline works that needed it most, but now they can’t produce their lifesaving infusion pumps that treat COVID-19 because of the national microchip shortage. That is why when I heard of their dilemma I immediately sprang to action, and am now here to launch my two pronged plan to keep Baxter pumping out these pumps!” said Senator Schumer. “My just passed Chips and Science Bill is just what the doctor ordered to help cure America’s long-term supply chain woes, by bringing microchip manufacturing back from overseas to places in Upstate New York like the Western New York STAMP campus.  We should be making semiconductors in Batavia, NY, not Beijing.”

“Hospitals and patients in New York and across the country depend on Baxter’s life-saving products – including the infusion pumps we build in Medina,” said José (Joe) E. Almeida, chairman, president and chief executive officer, Baxter International. “We greatly appreciate Senator Schumer’s partnership and continued support to help prioritize the manufacturing of chips for medical devices that are critical to the care of American patients.”

Schumer explained that the microchip shortage is impacting everything from wait times for people to buy cars and computers, to healthcare providers, who are now having to wait longer to receive needed devices like those made by Baxter. Baxter’s Spectrum IQ infusion system, which is built in Medina, NY, requires approximately 70 chips per pump, and in recent months they have had to slow down production significantly due to the lack of a sufficient supply of chips. 

Currently, only 12% of chips are manufactured domestically, compared to 37% in the 1990s, and many foreign competitors, including China, are investing heavily to dominate the industry. Nearly 75% of global semiconductor production is now occurring in East Asia and foreign government subsidies drive the majority of the cost difference for producing semiconductors overseas.

In June, HHS sent a letter highlighting Baxter’s infusion pumps as in “critical need” for the nation’s ongoing pandemic response and that it is crucial their manufacturing supply chain be preserved so that they can continue to produce their essential medical devices. Schumer said that he is now actively working with Texas Instruments (TI) to help prioritize components for their lifesaving medical devices so that Baxter’s production of these pumps is not impacted.  Last year, Schumer successfully assisted Baxter in securing chips from another supplier, Qualcomm, which were then in short supply and now he is pushing to do the same for the TI chips. 

In the long term, Schumer said that his CHIPS and Science Bill was written to address problems exactly like this by reviving American manufacturing of semiconductors and reducing dependence on foreign supplies which has directly contributed to the current supply chain crisis. The senator explained his bill will help build more resilient domestic supply chains thus lowering costs for families, fighting inflation, and strengthening national security for industries like healthcare for Baxter, defense, auto, and more.

Specifically, Schumer highlighted that the bill includes:

  • $39 billion for the CHIPS for America Fund to provide federal incentives to build, expand, or modernize domestic facilities and equipment for semiconductor fabrication, assembly, testing, advanced packaging, or research and development to help attract major chip manufacturers to shovel ready sites like STAMP in Genesee County.  
  • $11 billion for Department of Commerce research and development including creating a National Semiconductor Technology Center (NSTC) a public-private partnership to conduct advanced semiconductor manufacturing, with Albany Nanotech primed to be a top contender to serve as a major hub for the NSTC, and other specialized R&D programs that universities across the state are in a strong position to compete for.
  • $2 billion for the DoD CHIPS for America Defense Fund.
  • $200 million for the CHIPS for America Workforce and Education Fund to kick start development of the domestic semiconductor workforce, which faces near-term labor shortages, by leveraging activities of the National Science Foundation.
  • A new Investment Tax Credit for semiconductor manufacturing facilities and equipment.

Schumer explained that New York is uniquely suited to take advantage of these federal investments to reassert America’s global technological leadership. New York is currently home to over 80 semiconductor companies that employ over 34,000 NY workers, including global industry leaders like GlobalFoundries, Wolfspeed, onsemi, IBM, and other major microchip and innovation companies that support them like Corning Inc. in Monroe County which just announced a $139M, 270 job expansion in anticipation of this bill. Schumer said investments like these are only the beginning though, and now that his bill has finally become law, the ripple effects from more chip fabs and their supply chains being built in places like Upstate New York will give companies like Baxter and the American economy the stability it needs to avoid shocks like this again in the future. 

A copy of Schumer’s recent letter to Texas Instruments appears below:

Dear Mr. Templeton,

I write to request Texas Instruments’ (TI) assistance to continue to provide the required computer chip components to Baxter International to ensure it can continue to manufacture lifesaving medical devices that the U.S. Department of Health and Human Services (HHS) has determined are in “critical need” including Baxter’s Spectrum IQ Infusion Pump which is manufactured in Medina, New York, as well as the PrisMax and PrismaFlex renal replacement therapy (CRRT) devices.  These pumps and devices are critical in the clinical treatment of COVID-19 patients, providing lifesaving care in our nation’s efforts to combat the pandemic. 

As such, I understand TI recently received a copy of a letter from HHS’ Assistant Secretary for Preparedness and Response that indicated HHS has now “identified a critical need” for these lifesaving products and urged Baxter to prioritize the manufacturing of these medical devices.  Furthermore HHS wrote, “it is critical that Baxter’s supply chain is not impacted so we also request that any work, services, and materials requested by Baxter be prioritized in any possible way.”   As you know, TI is Baxter’s supplier for several critical components required for the manufacturing of these devices.  Recent inconsistent delivery of these TI components is now threatening the continued manufacturing of these critical medical devices.  Ensuring the availability of these component parts is not only vital to Baxter’s Medina, NY workforce, but to hospital patients and medical personnel throughout the country who depend on these lifesaving devices.

Therefore, I ask that TI honor this HHS request and work with Baxter to deliver necessary TI components for their medical devices as quickly as possible.   I appreciate your quick attention to this matter and your assistance in making these components available. 

Sincerely,

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