Senate Advances Bill To Boost U.S. Microchip Production—Here’s What’s In It

The Senate voted Tuesday morning to approve a bill that would allocate billions of dollars in federal funds to boost U.S. chip production.

The Senate voted to break the legislative filibuster and limit debate on the "CHIPS plus" bill, allowing for a final vote later this week.

The bill includes subsidies for domestic chip manufacturing and research that are crucial to the military and automotive industry.

The construction of new chip fabrication plants would be funded by the subsidies.

There is a 25% tax credit for U.S. chip manufacturing investments, as well as a billion dollars for developing technology to help U.S. firms wean off their dependence on foreign telecommunications equipment.

The bill is a slimmed-down version of legislation that Republicans threatened to block if Democrats continued to pursue unrelated efforts to pass a package to fund their priorities.

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Lawmakers who support the bill are in a race against time to pass the bill through the Senate and the House and send it to President Joe Biden before Congress begins a five-week recess in August. Nancy Pelosi stated that the House would vote on the bill this week.

America's invention of the Semiconductor. Biden said Monday that it was time to bring it home. The legislation will advance our nation's competitiveness and our technological edge, and he urged lawmakers to pass it as quickly as possible.

Key Background

The supporters of the legislation say the bill will help increase domestic production and offset the effects of a global chip shortage. They say it would make the U.S. more competitive against China. Most of the world's chips are made in Taiwan. The current version of the bill allocates $11 billion for the Department of Commerce to create regional technology hubs dedicated to manufacturing and technology advances, as well as $200 billion for scientific research.

Chief Critic

One of the bill's most vocal opponents has compared it to a "bribe" to keep large companies in the U.S. after years of closing down domestic plants. Last year, the five biggest companies made $70 billion in profits. He said in a statement that it sounded like the companies needed corporate welfare.

The Senate hurdle was cleared by the chip funding bill.

The bill to increase U.S. chip production cleared a key Senate hurdle.