A bill that would give subsidies for the manufacturing of semiconductor chips, a technology that the Biden administration claims is essential to the US economy and national security, was approved by the Senate on Wednesday. It ended up being 64-33 in favor.
Prior to being sent to President Biden’s desk for his signature, the bill still has to pass the House. Before the August vacation, Democrats aim to approve the bill through both chambers. Democrats have subsequently continued to negotiate in order to come to a compromise that might pass both chambers of Congress after the House earlier this year enacted a bill to encourage the development of semiconductor chips.
“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,” Mr. Biden said in a statement. “It also will create jobs – good-paying jobs right here in the United States. It will mean more resilient American supply chains, so we are never so reliant on foreign countries for the critical technologies that we need for American consumers and national security. I want to thank senators in both parties for their hard work on this legislation.”
The CHIPS for America Act, which stands for Creating Helpful Incentives to Produce Semiconductors for America, would allocate $52 billion in subsidies and provide an investment tax credit to entice semiconductor businesses to increase their domestic manufacturing. In order to convey the point that the United States depends too heavily on China for semiconductors that power electronics, medical supplies, and defense equipment, Mr. Biden met virtually with CEOs and labor leaders on Monday to discuss the measure. The measure needs to be signed by the president as soon as feasible. The president also said that boosting domestic semiconductor manufacture will aid in the battle against inflation at the time.
“One-third of the core inflation last year in 2021 — one-third of it — was due to the high price of automobiles,” he said. “You know why that’s driven? That’s driven by an inability to manufacture more automobiles. Why? The shortage of semiconductors.”
In an appearance with CBS News’ “Face the Nation” on Sunday, Commerce Secretary Gina Raimondo noted that the United States does not presently produce any “leading edge” semiconductors, the specialized processors required for high-end computer and military equipment. She told moderator Margaret Brennan, “We acquire practically all of them from Taiwan… 90% of them we buy from Taiwan. She stated that American businesses must increase their production in order for the U.S. Raimondo pointed out that incentives are also offered by other European nations.
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Raimondo was certain the law would make it to Mr. Biden’s desk on Sunday. She anticipated that both the House and the Senate would vote in favor of this measure.
Additionally, she responded angrily to criticism coming from both the left and the right. The law has been compared to a blank check for the semiconductor sector by Senator Bernie Sanders. According to Raimondo, the measure has strong bipartisan support.
“I fully dispute Sen. Sanders’ characterization of this. It isn’t a blank check,” Raimondo said on Sunday. “There are many strings attached. Strings attached — companies can’t use this money to build facilities in other countries. Companies who accept this money can’t then turn around and be building facilities in China for leading edge technology. There’s a lot of strings attached around the quality of jobs that have to be created, working with small contractors and minority-owned contractors. There are labor protections. So to say it’s a blank check is just dead wrong.”
— Jack Turman contributed to this report.