Home NewsBusiness News Senate Advances Bill To Boost U.S. Microchip Production—Here’s What’s In It

Senate Advances Bill To Boost U.S. Microchip Production—Here’s What’s In It

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Senate Advances Bill To Boost U.S. Microchip Production—Here’s What’s In It


topline

Amid a national chip shortage, a bill that would allocate billions of federal funds to boost U.S. semiconductor production passed a crucial vote in the Senate on Tuesday morning, potentially setting the stage for the bill to pass the House and make its way to the House of Representatives. Clear the road.

key facts

The Senate voted 64-32 bipartisan to break a legislative filibuster and limit debate on the “Chip Plus” bill, allowing a final vote later this week, Senate Majority Leader Chuck Schumer (DN . .Y.) said he hoped the senator “can continue to complete this legislation as quickly as planned.”

The legislation includes $52.7 billion in subsidies for domestic chip manufacturing and research, and $2 billion earmarked for less advanced legacy chips, which are critical to the military and automotive industries, according to a summary of the bill.

The subsidies will mostly go to U.S. companies to help fund the construction of new semiconductor fabrication plants, where chips are made.

It also provides a 25 percent tax credit for U.S. semiconductor manufacturing investments and sets aside $1.5 billion to develop technology to help U.S. companies wean themselves off foreign telecommunications equipment.

The bill is a stripped-down version of legislation that Republicans threatened to block earlier this month if Democrats continued their unrelated efforts to pass a package to fund their climate, tax and prescription drug priorities.

what to watch out for

Lawmakers backing the bill are racing against time to pass it in the Senate and House of Representatives and get it to President Joe Biden’s desk before Congress begins a five-week recess in the second week of August. House Speaker Nancy Pelosi (D-Calif.) expressed support for the bill and said the House plans to vote on it as early as this week.

key offer

“America invented the semiconductor. It’s time to bring it home,” Biden said Monday afternoon at a conference he attended virtually. He said the legislation would “enhance our nation’s competitiveness and technological advantage” and urged lawmakers to pass the bill as soon as possible.

key background

Proponents of the legislation believe the bill will help increase domestic semiconductor production and offset the impact of a global chip shortage that has emerged during the Covid-19 pandemic. They said it would also make the U.S. more competitive against China, a world leader in building new chip factories. About 75% of the world’s chips are produced in East Asia, especially Taiwan. The current version of the “CHIPS plus” bill also allocates $11 billion for the Commerce Department to create “regional technology centers” dedicated to manufacturing and technological advancement, and $200 billion in funding for scientific research.

chief critic

Bernie Sanders (I-Vt.) is one of the bill’s most vocal opponents and likens it to “bribery” to keep big companies on board after years of closing domestic factories and outsourcing jobs overseas. U.S. “The five largest semiconductor companies … made $70 billion in profits last year. Does it sound like these companies really need corporate benefits?” he said in a statement earlier this month.

Further reading

Chip funding bill clears key Senate hurdle (Axios)

Bill to boost U.S. chip production and competition with China clears key Senate hurdle (CNBC)

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