The US Senate voted to advance the slimmed-down version of its bill designed to boost U.S. semiconductor competition with China. Here are the key features of the bill.
Key features of the bill to boost U.S. semiconductor production
The Senate on Tuesday voted to advance a slimmed-down version of its bill aiming to boost American semiconductor competition with China. The bill cleared a key procedural hurdle in a 64-34 vote. It will provide around $50 billion in subsidies to bolster U.S. computer chip manufacturing.
This will also help support US computer chip manufacturing. The process is a multifaceted bipartisan effort combining the interests of various committees from national security to economics.
The Senate’s procedural move hence makes way for the chamber to hold a vote on the final passage. This may occur later this week or early next week. Following the vote, it will go to the House for passage before heading to President Biden’s desk for a signature, making it a law. Once legal this will help in incentivizing the production of semiconductors in the US. it will also help in reducing US’ dependency on manufacturers based in Asia. According to the Biden administration, a bigger domestic chip industry will help in easing the supply-chain discussions brought on by the pandemic. The global shortage over the last two years rippled through various industries ranging from automobiles and mobile phones to defense systems.
More on the bill boosting Semiconductor production
The procedural step comes over a year after Senate’s bipartisan vote approving a $250 billion bill for reinforcing chipmaking in the US. The bill also stresses reviving American research and development. However, the House did not consider the legislation after clearing it. Instead, House Democrats drafted their version of a Chinese competition act including a gentle national security tone and emphasis on climate change funding. Republicans opposed it.
For months, democrats attempted to reconcile the differences between the two versions. However, owing to the rising annual inflation, the Biden administration suggested it would instead approve a simpler bill magnifying semiconductor production. “If the US lost access to advanced semiconductors (none made in the US) in the first year, GDP could shrink by 3.2 percent and we could lose 2.4 million jobs. The GDP loss would be 3X larger ($718 B) than the estimated $240 B of US GDP lost in 2021 due to the ongoing chip shortage,” stated Sen. John Cornyn. Senator Cornyn is a texas republican and the lead author of the senate’s original text.