Senate passes bill to boost US chip manufacturing
The US government has just taken a key step in its bid to improve domestic chip production and compete with rivals like China. CNBC reports that the Senate passed the CHIPS and Science Act, a bill to fund and encourage American semiconductor manufacturing, in a vote of 64 to 33. The measure includes more than $52 billion for U.S. chip companies, additional funding for technology development, and tax credits to spur investment in manufacturing.
The law, also known as “CHIPS-plus,” is a scaled-down version of bills that previously circulated through Congress. These efforts have been met with opposition from across the political spectrum. Republicans have opposed earlier measures, accusing Democrats of pushing a partisan reconciliation bill that would include climate, medical and tax considerations. There were also fears that funding would inadvertently reach China. Independent Senator Bernie Sanders, meanwhile, was concerned that a past variant was a "blank check" for already profitable chipmakers.
The House will still have to pass and help reconcile related legislation before President Biden can sign the bill. This is, however, considered very likely, as the Senate has authorized a filibuster threshold of 60 votes. The House is expected to pass his version as the Democrats need only wave their majority to succeed.
The expected law is unlikely to have an immediate effect when building new factories takes years and upgrades are not necessarily faster. This will not solve short-term chip shortages. Even so, CHIPS could play an important role in American tech manufacturing. In addition to reducing the risk of future shortages, it could reduce reliance on Taiwan and other semiconductor hubs threatened by countries like China. While there's no guarantee the law will lead to more jobs and lower prices, it could help the United States compete in an increasingly tough market.
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The US government has just taken a key step in its bid to improve domestic chip production and compete with rivals like China. CNBC reports that the Senate passed the CHIPS and Science Act, a bill to fund and encourage American semiconductor manufacturing, in a vote of 64 to 33. The measure includes more than $52 billion for U.S. chip companies, additional funding for technology development, and tax credits to spur investment in manufacturing.
The law, also known as “CHIPS-plus,” is a scaled-down version of bills that previously circulated through Congress. These efforts have been met with opposition from across the political spectrum. Republicans have opposed earlier measures, accusing Democrats of pushing a partisan reconciliation bill that would include climate, medical and tax considerations. There were also fears that funding would inadvertently reach China. Independent Senator Bernie Sanders, meanwhile, was concerned that a past variant was a "blank check" for already profitable chipmakers.
The House will still have to pass and help reconcile related legislation before President Biden can sign the bill. This is, however, considered very likely, as the Senate has authorized a filibuster threshold of 60 votes. The House is expected to pass his version as the Democrats need only wave their majority to succeed.
The expected law is unlikely to have an immediate effect when building new factories takes years and upgrades are not necessarily faster. This will not solve short-term chip shortages. Even so, CHIPS could play an important role in American tech manufacturing. In addition to reducing the risk of future shortages, it could reduce reliance on Taiwan and other semiconductor hubs threatened by countries like China. While there's no guarantee the law will lead to more jobs and lower prices, it could help the United States compete in an increasingly tough market.
All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you purchase something through one of these links, we may earn an affiliate commission.
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