Senate passes massive package to boost US computer chip production

WASHINGTON — The Senate on Wednesday approved a sweeping package aimed at boosting domestic production of computer chips and helping the United States remain competitive with China.

The 64-33 vote marks a rare bipartisan victory just over three months ahead of the crucial midterms in November; 17 Republicans voted yes, along with all Democrats. The package, known as “CHIPS-plus,” is now going to the House of Representatives, which is expected to hand it over by the end of the week and send it to President Joe Biden for signature.

“Are we on the cusp of another generation of American ingenuity, American discovery, American leadership? By passing our chips and science bill today, the Senate is saying, ‘Yes, we are,’ and doing so in a loud bipartisan voice,” Senate Majority Leader Chuck Schumer, DN.Y., said on the floor before the vote.


“By approving one of the largest investments in science, technology and manufacturing in decades — in decades — we say today that America’s best years are yet to come.”

At the heart of the package are more than $50 billion in subsidies for domestic semiconductor manufacturing and research.

Supporters on Capitol Hill, as well as key members of Biden’s cabinet, have argued that making microchips at home — rather than relying on chipmakers in China, Taiwan and elsewhere — is vital to U.S. national security, especially when it comes to Chips that are used for weapons and military equipment.

The package also includes tens of billions of dollars in approvals for science and research programs and regional technology centers across the country.

The Budget Office of Congress said CHIPS-plus would cost nearly $80 billion over the next decade.

The final chips bill is a stripped-down version of a much broader competition package for China that House and Senate lawmakers were negotiating. Previously, the Senate passed its bill known as USICA, while the House of Representatives passed its own version, the America COMPETES Act. But lawmakers failed to resolve their differences, and leading Democrats decided to change strategy and roll back legislation.

The final package was more similar to the bill passed by the House, a senior House Democratic adviser said.

In recent weeks, Secretary of Commerce Gina Raimondo and Assistant Secretary of Defense Kathleen Hicks have been making the rounds on Capitol Hill, pushing for a tighter, chip-centric bill and arguing that failure to act by the summer recess would jeopardize America’s national security.

The global pandemic and related supply chain issues created a chip shortage in the US, affecting companies such as automakers, as well as manufacturers of smartphones and home electronics. According to Raimondo, 90% of the world’s most advanced chips are made in Taiwan, which is under threat from China.

“The purpose of all this money is to make more chips in America,” Raimondo said in a last appearance on CNBC. “The national security gap here…is almost unique in the fact that we are so dependent on Taiwan and this is a product so necessary for innovation and military equipment.” Senate passes massive package to boost US computer chip production

Fry Electronics Team

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