The Senate on Wednesday passed legislation that includes $52 billion in grants and incentives for US semiconductor manufacturing, an industry that has steadily lost ground to foreign competitors in recent years.
The 64 to 33 vote comes after more than a year of debate and marks a major legislative victory for President Joe Biden, whose agenda has largely stalled in the Senate, where 60 votes are required to pass most legislation.
The bill is expected to pass the House later this week and then move to Biden’s desk for his signature.
Wall Street is likely to welcome the help. The
In addition to the semiconductor funding, the legislation includes money for research and workforce training and 5G wireless technology.
The measure has been presented as both a way to reinvigorate the US industrial base and fortify the country’s national security interests against future supply chain disruptions overseas, where the vast majority of advanced semiconductors are currently produced.
“Our grandchildren will be holding good-paying jobs in industries we can’t even imagine because of what we do today,” Senate Majority Leader
Senate Republican leader
Among the key provisions in the package:
- $39 billion in financial assistance to build domestic semiconductor facilities
- $11 billion to fund chips research and workforce development
- $2 billion for defense-related chips manufacturing
- Restrictions on use of funds for stock buybacks, foreign investment
- A 25% investment tax credit for the manufacture of semiconductors and tools to create semiconductors
- $500 million for an international secure communications program
- $200 million for semiconductor industry worker training
- $1.5 billion for public wireless supply-chain innovation
- Changes and authorizes funding for programs in the National Space and Aeronautics Administration, National Institute of Standards and Technology, National Science Foundation
- Authorizes new programs under Energy Department
The measure’s path to passage has taken multiple twists and turns over the past 18 months as lawmakers wrestled with both political and policy priorities, trying to come up with a proposal that would pass both chambers.
It was originally introduced in the Senate last year by Schumer and Senator
A bipartisan group of senators -- led by Democrats
At several junctures the legislation seemed all but dead, even as chip companies including
Chip fabrication facilities, or fabs, take as many as two to three years to become fully operational, which is one of the reasons why proponents were pushing to pass the legislation as soon as possible.
Opposition to the bill in the Senate united socialist
“If we truly want to beat China, we can’t emulate Beijing’s semi-socialist economic model,” Toomey said in a statement. “The best way to encourage investment, spur economic growth, and enhance American competitiveness is to create policies that benefit all industries, businesses, and workers alike.”
Sanders said on the Senate floor that US industrial policy should “not mean the government providing massive amounts of corporate welfare to profitable corporations without getting anything in return.”
In the House, McCarthy and other Republicans oppose the legislation, with some criticizing it for not being tough enough on China. Representative
Young, speaking on Bloomberg Television, said he believed Biden could sign the bill into law as soon as the weekend. “I expect that will happen,” Young said.
The US still leads the world in chip design, but has largely outsourced manufacturing to overseas firms like
--With assistance from
To contact the editors responsible for this story:
Megan Scully, Ramsey Al-Rikabi
© 2022 Bloomberg L.P. All rights reserved. Used with permission.