Senate Votes to Advance Bill to Subsidize U.S.-made Semiconductor Chips


The Senate voted Tuesday to advance a bill that would provide $52 billion in subsidies to domestic semiconductor manufacturers, as well as invest billions in science and technology innovation, in a bid to strengthen the United States' competitiveness and self-reliance in what is seen as a keystone industry for economic and national security.

The legislation - which has been referred to as the "CHIPS Act" but which Senate Majority Leader Charles E. Schumer (D-N.Y.) dubbed the "Chips and Science" bill Tuesday - resembles the United States Innovation and Competition Act, the original form of the bill that cleared the Senate last year but ran aground in the House. On Tuesday morning, the Senate voted 64-32 to limit debate and move the bill toward a final vote. If the Senate passes the bill, as expected, it would then move to the House, where Speaker Nancy Pelosi (D-Calif.) has said it has the support for passage.

President Biden has said the chips funding legislation is one of the top priorities on his agenda, and he convened a virtual meeting Monday with a group of business and labor leaders to discuss the bill's importance. Semiconductor chips are used many products, including vehicles and cellphones, medical equipment and military weapons, he said, and a shortage of chips during the coronavirus pandemic has caused price hikes and supply-chain issues in several industries.

Commerce Secretary Gina Raimondo, who has been spearheading the White House's efforts to lobby for the bill, noted Monday that the United States used to make 40 percent of the world's chips but now makes about 12 percent - and "essentially none of the leading-edge chips," which come almost entirely from Taiwan. The United States has also invested "nearly nothing" in semiconductor manufacturing, she said, while China has invested $150 billion to build its own domestic capacity.

Much of the $52 billion would go to chip manufacturers to incentivize construction of domestic semiconductor fabrication plants - or "fabs" - to make the components, which are the brains that power all modern electronics. Countries around the world have been scrambling to increase production of the components by offering manufacturers subsidies to build factories, which cost billions of dollars to construct.

The bill also includes about $100 billion in authorizations over five years for programs including expanding the National Science Foundation's work and establishing regional technology hubs to support start-ups in areas of the country that haven't traditionally drawn big funding for tech. The NSF would receive funds for a new technology directorate that would help turn basic research breakthroughs into real-world applications in fields such as artificial intelligence and quantum computing.

Semiconductor Industry

The Senate's advancement of the bill Tuesday came after months of debate and setbacks. Though there was bipartisan support in the Senate to advance the bill, several key Republican senators still voted no, including retiring Sens. Richard C. Shelby (Ala.) and Patrick J. Toomey (Pa.). Sen. Tommy Tuberville (R-Ala.) also opposed advancing the bill, despite Lockheed Martin chief executive Jim Taiclet wholeheartedly endorsing the legislation in his meeting with Biden the day before, emphasizing that semiconductor chips are a critical component of Javelin missiles, which are manufactured in Alabama. Sen. Bernie Sanders (I-Vt.), who voiced his opposition to the bill leading up to Tuesday's vote, also voted against advancing the legislation.

Pelosi has vowed to move quickly on the bill once it arrives in the House. At an event in Michigan last Friday with labor leaders and the state's congressional delegation, Pelosi said there was some support for the bill from GOP lawmakers.

"They understand the national security aspects of it," Pelosi said. "I don't know how many [Republican votes] we get, but it will be bipartisan."


Wang, A. B., & Whalen, J. (2022, July 26). Senate votes to advance bill to subsidize U.S.-made semiconductor chips. Washington Post.

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