House passes CHIPS bill to boost US semiconductor manufacturing

Semiconductor manufacturing and a host of other high-tech activities – from nuclear fusion to drone transport and particle accelerator research – are set to receive a boost from a bill now forwarded to President Biden for his signature.

The Chamber’s 243 to 187 votes(Opens in a new window) Thursday for the CHIPS And Science Act(Opens in a new window) followed the Senate vote by 64 to 33(Opens in a new window) Wednesday for this bill, which in turn came months after each chamber passed different and greater measures of technological competition built around it.

The core of the $280 billion CHIPS Act — short for “Creating Useful Incentives to Produce Semiconductors” — is $52.7 billion in funding to promote semiconductor chip manufacturing in the U.S. and help alleviate chip shortages. The money will pay incentives to build factories, provide workforce training, pay for targeted tax credits, and underwrite loans and loan guarantees to qualifying companies.

In June, for example, Intel singled out this funding as a critical path item to build a planned chip factory in Ohio to its full scope of $100 billion. Intel announced plans for this location in January as a $20 billion venture to start.

The 1,054 page text(Opens in a new window) (PDF), as described in a 39-page abstract(Opens in a new window) (PDF), also provides funding for research and development activities in a number of government agencies. Its cast of characters includes the Department of Energy (the bill will support research on energy storage, carbon sequestration, nuclear fission and fusion energy, particle physics and more), the National Institute of Standards and Technology (security of information, digital identity, and home manufacturing support), the National Science Foundation (e.g., expanding STEM education, supporting technology workforce training, and increasing the diversity and security of research in technology fields), the Administration National Oceanic and Atmospheric (for example, works to combat ocean acidification), and NASA (operating the International Space Station until 2030 and integrating drone flights into the national air transport system, among others).

The CHIPS Act, however, is considerably thinner than its two bills, the House America COMPETES Act.(Opens in a new window) and the US Senate Innovation and Competition Act(Opens in a new window). The former contained provisions to establish a startup visa program and incorporated a bill to hold online retail platforms accountable for counterfeit goods sold on their websites, while the latter included foreign aid programs aimed at countering China’s influence.

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In a statement Thursday(Opens in a new window)Biden said he would sign the CHIPS Act.

“By making more semiconductors in the United States, this project will increase domestic manufacturing and reduce costs for families,” he said. “And it will strengthen our national security by making us less dependent on foreign semiconductor sources.”

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