U.S Senate passes $52 billion bill for semiconductor chip manufacturing

In a move to achieve a compromise after months of debate, the US Senate adopted a bill on Monday that would offer $52 billion in US subsidies for semiconductor chip manufacturing.

The 68-28 procedural vote sends the bill back to the House of Representatives, kicking off a long process that would eventually lead to a formal “conference” where members from both chambers will try to reach an agreement on a compromise version.

A continuous chip shortage has impacted production in the automotive and electronics industries, prompting some companies to reduce production, and there have been mounting calls to reduce reliance on foreign semiconductors.

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In June, the Senate passed semiconductor legislation that included $190 billion in funding to boost American technology and research to compete with China, while the House passed its version in early February.

On a wide variety of issues, including trade and some climate provisions, the bills take distinct approaches to tackling US competition with China.

Maria Cantwell, the chairwoman of the Senate Commerce Committee, said the vote was critical to “getting us to genuine negotiations.”

Jen Psaki, a White House spokesperson, described the Senate decision as “another step forward.” “to improve our supply chains, produce more in the United States, and outcompete China and the rest of the world for decades to come We expect the House of Representatives to begin the formal conference process as soon as possible.”

U.S Senate passes $52 billion bill for semiconductor chip manufacturing

According to a senior House Democratic aide, the house is expected to take up the bill this week and send it back to the Senate. To start the conference, the Senate will have to vote again. It’s possible that a final deal won’t be reached until the summer.

Senator Bernie Sanders, an independent, slammed the $52 billion in subsidies, calling them “corporate greed,” and arguing that in exchange for subsidies, taxpayers should receive warrants or stock from prosperous chip companies.

“The financial gains made by these companies must be shared with the American people, not just wealthy shareholders,” Sanders said.

U.S. Commerce Secretary Gina Raimondo stated that the United States produced roughly 40% of all chips two decades ago, but now only accounts for 12% of worldwide production. The Senate vote brought the US “one step closer” to “revitalising American semiconductor industry, protecting our crucial supply chains, and bringing good-quality manufacturing jobs back home.” Because of the chips shortage, GM announced on Friday that production at a pickup truck factory in Indiana would be halted for two weeks in April.

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