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Legislation to Boost Semiconductor Chip Manufacturing Sent to Biden’s Desk

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Reinette LeJeune

The U.S. Senate and House have passed legislation to subsidize the domestic semiconductor industry, in hopes that it will support companies as they compete with China during a shortage that is affecting everything from cars, weapons, washing machines and even video games. After the Senate’s passing of the bill with a 64 to 33 bipartisan vote, and the House’s passing of the bill with a 243 to 187 vote, President Biden now plans to sign it into law on August 9th. 

Known as the CHIPS and Science Act, it will provide around $52 billion in government subsidies for U.S. semiconductor production as well as an investment tax credit for chip plants that is estimated to be worth $24 billion. The legislation would also allocate more than $170 billion over five years to boost U.S. scientific research to better compete with China, however, Congress would still need to pass separate appropriations legislation to fund those investments. “This legislation is going to create good paying jobs, it will alleviate supply chains, it will help lower costs, and it will protect America’s national security interests,” said Senate  Majority Leader, Chuck Schumer. According to Senator Mark Warner (D-VA), the bill would help fund 10 to 15 new semiconductor factories. “If we had not done this, there would not be another American semiconductor manufacturing plant ever built in this country,” Warner said. 

Standing alongside Republican legislators who voted against the bill, including Pennsylvania Senator Pat Toomey, the Chinese Embassy in Washington has responded by saying their country is “firmly opposed” to the bill, which they claimed was  “entrenched in the Cold-War and zero-sum game mentality and runs counter to the common aspiration of people from all sectors in China and the US to strengthen exchanges and cooperation.”

The bill’s enactment into law has taken well over a year of work to accomplish. A previous version of the legislation passed in the Senate last year with large support, but later stalled in the House by Republicans, frustrating lawmakers who have viewed the competition with China and global supply chains as top priorities. In order to press Congress into acting, Biden, along with the bill’s supporters, recast the issue as one of national security. They announced the bill as essential to ensure the U.S. production of chips remained crucial to a wide range of consumer goods and military equipment. “As Americans are worried about the state of the economy and the cost of living, the CHIPS bill is one answer: it will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers,” Biden said in a statement after the Senate vote.