U.S. Senate votes to pass sweeping semiconductor industry bill

U.S. Senate votes to pass sweeping semiconductor industry bill

The U.S. Senate voted 64-32 on Tuesday to advance legislation to dramatically boost U.S. semiconductor manufacturing and make the domestic industry more competitive against China.

The law provides about $52 billion in government subsidies for U.S. semiconductor production and investment tax credits for $24 billion worth of chip factories.

The Senate is expected to vote on the final bill in the coming days, and the U.S. House of Representatives could follow suit as early as later this week.

As President Joe Biden and others have said in the context of national security, ensuring the production of U.S. chips critical to a variety of consumer goods and military equipment is critical.

Commerce Secretary Gina Raimondo called the vote “symbolic of a strong bipartisan coalition committed to making more chips in America. These chips keep our economy strong and our country safe.”

The bill aims to reduce persistent production shortages in industries such as autos, consumer electronics, medical devices and high-tech weapons, which have forced some manufacturers to cut production. Auto production has been hit especially hard.

Senate Democratic Majority Leader Chuck Schumer said ahead of the vote that “the pandemic has shown very clearly how a shortage of chips in the United States can cause a crisis.”

The Semiconductor Industry Association said the vote was “an important step toward enacting legislation that strengthens U.S. chip production and innovation, economic growth and job creation, and national security.”

Biden has pushed hard on the bill, which has been in the works for more than a year, with a version that passed the Senate in June 2021 but stalled in the House. That has disappointed lawmakers on both sides, who have made competition with China and global supply chain issues a top priority.

Critics such as Senator Bernie Sanders called the measure a “blank check” for high-margin chip companies.

As part of the administration’s push for legislation, Biden met Monday with the CEOs of Lockheed Martin, Medtronic and Cummins, as well as labor leaders.

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