The Senate voted 64-32 Tuesday to move toward final passage of legislation to provide $52 billion in subsidies to domestic manufacturers of semiconductors.
The CHIPS Act is meant to help the United States compete with China’s manufacturing capabilities. Tuesday’s vote limited debate on the measure, meaning that it could move to a final floor vote this week.
CHINA LIMITS OPERATIONS OF KEY TECH COMPANIES BECAUSE OF COVID-19 OUTBREAK
“Semiconductor chips are the building blocks of the modern economy — they power our smartphones and cars,” tweeted President Joe Biden on Tuesday. “And for years, manufacturing was sent overseas. For the sake of American jobs and our economy, we must make these at home. The CHIPS for America Act will get that done.”
The majority of the funding will go to chip manufacturers to incentivize them to develop and construct semiconductor factories in the U.S., providing thousands of jobs in states such as Ohio and Texas. It will also provide billions to other science-oriented organizations, including the National Science Foundation.
Semiconductors are a key element for constructing electronics, but factories have struggled to keep up with market demand. This has led several manufacturers to delay their work. Intel informed Ohio Gov. Mike DeWine and the state’s legislature in June that it was delaying its groundbreaking of the semiconductor plant because of the hold-up in passing the CHIPS Act.
Critics, though, fear the legislation may disproportionately benefit the larger manufacturers, including Intel. Smaller tech firms, such as AMD, Qualcomm, and Nvidia, appeared hesitant to support the Senate version of the legislation. The companies, which rely on third parties to construct their chips, voiced support for different legislation in the House that contains a manufacturing tax credit and a tax credit for chip designing activities.
Others are critical of the bill due to it doing little to hold China accountable. “The answer to the Chinese Communist Party’s malevolent ambitions is not spending billions of dollars to help Fortune 500 companies, with no guarantee those dollars won’t end up supporting these companies’ business operations in China,” said Heritage President Kevin Roberts during a Friday appearance on Fox Business. “Additionally, the act’s $250 billion price tag will contribute to record inflation and increase the already historic cost of living for working and middle-class Americans.”
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Intel announced Monday that it was taking the Taiwanese chip designer Mediatek as its first client for its semiconductor foundries.
The semiconductor shortage has had severe effects on a multitude of industries, including computer production and automotive production. Toyota cut its car production quota by 50,000 in July 2022 due to a lack of semiconductors.
