On Wednesday, the US Senate approved sweeping legislation to subsidize the US semiconductor industry in an effort to support businesses as they compete with China and ease a chronic shortage that has negatively impacted everything from vehicles to video games and weaponry.
With rare bipartisan support, the Senate passed the long-awaited law by a vote of 64 to 33. It might be passed by the House of Representatives as early as later this week, at which point President Joe Biden will sign it into law at the White House.The long-awaited "Chips and Science" measure offers $24 billion in investment tax credits and nearly $52 billion in government subsidies for US semiconductor industry.
In order to better compete with China, the measure would also authorize spending more than $170 billion over five years to increase US scientific research activities. To pay for those investments, Congress would still need to adopt separate appropriations legislation.
The Democratic majority leader in the Senate, Chuck Schumer, urged support for the proposal, saying that it would "create good-paying employment, ease supply chains, assist cut costs, and defend America's national security interests."
The majority of the investment granted on Wednesday was anticipated to go toward new factories, but once construction gets going, such projects will take two or three years to finish. According to Boeing Co., supply chain problems caused by chip shortages still exist.More than 90,000 unfinished vehicles, largely high-margin trucks and SUVs, are awaiting semiconductors and other parts, according to General Motors Co. In southeast Michigan, thousands of vehicles are parked.weeks of effort
It would take well over a year for the bill to become law. In June 2021, a more comprehensive version of the legislation was enthusiastically passed by the Senate, but it stalled in the House. This infuriated legislators from both parties who saw rivalry with China and concerns with the global supply chain as priority considerations.
Biden and other bill proponents used the threat to national security to persuade Congress to take action, arguing that US chip manufacture was critical for a variety of consumer items and military hardware.
After the Senate's passage, Biden issued a statement urging the House to swiftly enact the legislation.The CHIPS law, he said, "is one answer as Americans are concerned about the status of the economy and the expense of living: it would speed up the manufacturing of chips in America, decreasing prices on everything from cars to dishwashers."
Critics have referred to the legislation as a "blank check" to very lucrative semiconductor corporations; Senator Bernie Sanders was the lone senatorial democrat to vote against the policy.As part of the administration's drive for the legislation, Biden met virtually with the chief executives of Lockheed Martin Corp., Medtronic, and Cummins Inc., as well as labor leaders.
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