The U.S. Senate passed a bill to support the semiconductor industry.
Today the U.S. Senate overwhelmingly approved a bill that will provide billions of dollars in subsidies for semiconductor chip production in the U.S. The legislation is now moving on to the House of Representatives.
The CHIPS (Creating Helpful Incentives to Produce Semiconductors) for America Act was created to strengthen domestic semiconductor manufacturing and boost U.S. competitiveness with China. It will provide around $52 billion in funding for U.S. companies to produce semiconductor computer chips and a provision that offers a tax credit for investment in chip manufacturing.
These advanced semiconductors are key components of electronics, defense technologies, automobiles, and more. The U.S. does not make the most advanced version of these chips domestically. Companies in China and Taiwan are the leading manufacturers of cutting-edge chips.
The bill passed the Senate in a 64-33 vote. It will now make its way to the House, where if it passes, it will be sent to The White House for President Joe Biden’s signature. Many lawmakers are hoping it can make it to the President before Congress takes its recess in August.
Many lawmakers have argued the act is critical to ensuring national security. America’s share of global chip manufacturing has fallen from roughly 40 percent in 1990 to 12 percent today, according to a report from the Semiconductor Industry Association. This decline has made people worry about China’s growing grip on technology.
“If we want to support our national security, we can’t have the best semiconductor chips that are required for our satellite systems and our advanced fighter jets and chips and other weapons systems made in another country,” says Arizona Senator Mark Kelly.
Eric Schmidt, former CEO and chairman of Google (now Alphabet), says that passing the CHIPS Act is vital, but it isn’t enough. Without federal support for semiconductors and other important technologies, the U.S. simply isn’t playing to win.
Over the last decade, China’s investment in research and development has grown at twice the rate of the U.S. Schmidt says that passing and fully funding the U.S. Innovation and Competition Act, of which the CHIPS Act is one small part, is our best chance to regain lost momentum.
