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US Senate passes bill to boost domestic chip manufacturing

Source: Bill Brett

The US Senate passed a bill on Wednesday to boost domestic production of semiconductors, the in-demand microchips that power everything from smartphones to cars to weapons.

Global semiconductor supplies were disrupted by fallout from Covid-19 shutdowns, sparking widespread shortages of the chips — many of which are made in Asia.

The legislation, which now goes back to the House of Representatives for final passage, provides $52 billion to increase domestic semiconductor production and more than $100 billion over five years for research and development.

The CHIPS Act was passed in the Senate by a rare bipartisan vote of 64 to 33, with 17 Republicans joining hands with Democrats.

President Joe Biden welcomed Senate passage of the legislation that he said will “accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers.”

Global chip shortages notably slowed production of new automobiles last year, causing prices to increase.

“It will mean more resilient American supply chains, so we are never so reliant on foreign countries for the critical technologies that we need for American consumers and national security,” Biden said in a statement.

But Beijing hit out at the details, with foreign ministry spokesman Zhao Lijian saying that while the act “claims to be aimed at improving the competitiveness of US technology and chips, (it) contains provisions that restrict normal scientific and technological cooperation between China and the United States.”

“China is firmly opposed to this,” Zhao told reporters at a regular briefing on Thursday.

The version of the CHIPS Act passed Wednesday provides $39 billion to finance semiconductor manufacturing plants in the United States and another $13 billion for research.

Senate passage of the bill came a day after the South Korean group SK announced a huge investment in US semiconductors and other cutting edge industries.

The conglomerate said in a statement it plans to “increase its new investment in the United States by $22 billion in areas including semiconductors, green energy, and bioscience, creating tens of thousands of new high-tech, high-paying American jobs.”


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Agence France-Presse (AFP) is a French international news agency headquartered in Paris, France. Founded in 1835 as Havas, it is the world's oldest news agency.

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