One of President Joe Biden’s first stops after Thanksgiving 2022 will be to Bay City, Michigan. On Sept. 1, Governor Gretchen Whitmer celebrated the opening of the city’s new semiconductor wafer manufacturing plant. Owned by Korean firm SK Siltron, this factory is the product of a $300 million investment from the Biden administration. Michigan is not the only state to receive federal funds for that purpose. However, its new factory has the potential to help reduce supply-chain constraints that have plagued local automakers all year.
On Nov. 29, Biden will discuss his administration’s policies that helped spur chip production in states like Michigan. When he does, it will boost semiconductor stocks across the country. Which companies should investors be watching closely as Biden gears up for the Bay City address? Let’s take a closer look.
Semiconductor Stocks: What to Watch For
So far, this has been a good day and an overall excellent week for semiconductor stocks. Many companies have been trending upward all week, including Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Micron Technology (NASDAQ:MU). Despite a grim market outlook warning from Micron last week, all three companies have demonstrated impressive growth recently, with gains of close to 30% for the month.
InvestorPlace writer William White recently reported that semiconductor stocks are facing a troubling economic landscape amid weakening PC demand. However, that doesn’t mean that chip makers are destined for a difficult year ahead. Semiconductors are also an essential part of electric vehicle (EV) production, an area in which demand has spiked in 2022 and is expected to keep increasing. For a factory built in Michigan, this is especially convenient, as the state is known for auto manufacturing. Legacy automakers Ford (NYSE:F) and General Motors (NYSE:GM) are both based in Michigan and are highly focused on scaling EV production. A partnership with a local chip maker would be an excellent catalyst for either company, as well as for many of their peers.
Now, Biden’s address at the Bay City facility promises to shift focus to semiconductor stocks, pushing them up in the process. The president has prioritized boosting chip production throughout his time in office. Most notably, he signed the Creating Helpful Incentives to Produce Semiconductors for America (CHIPS) Act. Michigan has always been at the center of this movement. When Gov. Whitmer signed the bill’s executive directive in August 2022, Biden joined her virtually for the event.
The Bottom Line
The Nov. 29 address is the next step toward increasing chip production. It is an opportunity not just to tout the economic benefits of helping U.S.-based chip makers but to highlight the potential of the sector as a whole. As The Detroit News reports:
“The White House announcement said Biden “will discuss the progress we have made in the last two years, including by creating good-paying manufacturing jobs and building an economy from the bottom up and the middle out.”
Following the passing of the CHIPS Act, experts speculated that it would help boost semiconductor stocks in the long term. President Biden’s address next week will serve as a reminder why that is and why chip makers will play a vital part in U.S. manufacturing in the years to come.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.