The Senate passed a $280 billion bill aimed at boosting domestic semiconductor production and funding science and technology research, a key priority for the Biden administration and major manufacturers.
The measure, known as the Chips and Science Bill, passed the chamber with bipartisan support and now heads to the House, which is expected to take it up quickly and send it to President Joe Biden’s desk.
Biden hailed the measure as a “historic bill that will lower costs and create jobs.”
“As Americans are worried about the state of the economy and the cost of living, the CHIPS bill is one answer: it will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers,” Biden continued. “It also will create jobs – good-paying jobs right here in the United States. 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.”
The final vote was 64-33, with seventeen Republicans, including Minority Leader Mitch McConnell, R-Ky., voting in support of the measure along with nearly the entirety of the Democratic caucus. Sen. Bernie Sanders, I-Vt., was the only non-Republican to vote against the measure.
“I want to thank Senators in both parties for their hard work on this legislation,” Biden said of the bipartisan bill. “For decades, some ‘experts’ said we needed to give up on manufacturing in America. I never believed that. Manufacturing jobs are back. Thanks to this bill, we are going to have even more of them. The House should promptly pass it and send this bill to my desk.”
Senate Majority Leader Chuck Schumer, D-N.Y., who has championed the bill in its various iterations for more than a year, said that the measure will be a transformative one for American manufacturing and competitiveness.
“After years of hard work, the Senate is passing the largest investment in science, technology and advanced manufacturing in decades,” Schumer said on the Senate floor Wednesday. “This Chips and Science Bill is going to create millions of good paying jobs down the road. It will alleviate supply chains, it will help lower costs and it will protect America’s national security interests.”
“All too often our government and our businesses are accused of being too short-term,” he continued. “But this is one of the most significant long-term thinking bills we passed in a very long time. I told our caucus yesterday that our grandchildren will hold good paying jobs in industries we can’t even imagine because of what we are doing right now. And we did it together, both sides cooperating in good faith on some truly difficult issues.”
“The American people deserve to see more examples like this, of both sides coming together to do very, very big things that will leave a lasting impact on our country,” Schumer added. “And I am confident that future generations will look back on the passage of this bill as a turning point for American leadership in the 21st century”
The measure contains $52.7 billion in subsidies to boost domestic semiconductor production, along with a 25% tax incentive for investments in domestic chip investments worth roughly $24 billion.
It also contains $200 billion for federally backed scientific research, $1.5 billion for the development of “open-architecture, software-based wireless technologies” and $11 billion for the Commerce Department to establish “regional technology hubs” nationwide.
The measure also includes certain “safeguards,” including language which says that federal funds cannot be used for stock buybacks, nor can they be used to “build advanced semiconductor production facilities in countries that present a national security concern,” including China.
The bill’s proponents on both sides of the aisle say that it’s crucial for both national and economic security, as well as essential to ease supply chain disruptions, bolster national security and increase competitiveness with China.
“One-third of the core inflation last year in 2021 — one-third of it — was due to the high price of automobiles,” President Joe Biden said Monday at a meeting with CEOs and labor leaders. “You know why that’s driven? That’s driven by an inability to manufacture more automobiles. Why? The shortage of semiconductors.”
“America invented semiconductors, but over the years, we let the manufacturing of those semiconductors get sent overseas,” Biden added. “And we saw that during the pandemic, when our factories overseas that make these chips shut down, the global economy basically comes to a halt, driving up the costs for families all around the world — but particularly here at home.”
“We source all of our high-end computer chips, mostly from Taiwan, some from South Korea,” Sen. Todd Young, R-Ind., one of the bill’s biggest backers in the Republican caucus, said on CNBC on Tuesday. “And we just can’t be that dependent on a country so far away from the continental United States for our missile system chips [and] for the components that go into our radars and our aircraft.”
A number of major companies have announced plans to build semiconductor manufacturing plants in the United States, including, according to the White House:
- Samsung, which is set to invest $17 billion to build a new semiconductor facility in Taylor, Texas;
- Panasonic Energy, which announced plans to invest $4 billion and create 4,000 jobs in a lithium-ion battery factory in De Soto, Kansas;
- Stellantis and Samsung, which announced a $2.5 billion joint venture to manufacture batteries in Kokomo, Indiana;
- Intel’s $20 billion fab outside Columbus, Ohio;
- Texas Instruments investing up to $30 billion in Texas;
- Wolfspeed’s $1 billion expansion in North Carolina
- Expansions by Global Foundries and SK Group
President Biden and South Korean conglomerate SK Group on Tuesday announced a new $22 billion commitment to invest in American technology, including the semiconductor industry.
The SK Group said it would invest $15 billion in the semiconductor industry, including research and development, materials and a new packaging facility. SK Group Chairman Chey Tae-won said the investments would create “tens of thousands” of “highly-paid and highly-skilled” jobs.
“We believe our view [of] the United States as our most important business partner,” he said. “One thing we can work together is building a skillful workforce.”
For some companies, expansion plans are contingent on passage of the bill. Intel delayed the ceremonial groundbreaking on a planned $20 billion facility near Columbus, Ohio, set for last week, citing “uncertainty” regarding the legislation.
Pat Gelsinger, the company’s CEO, told Washington Post Live earlier this month that he has made “super clear” to both Democrats and Republicans in Congress “that if this doesn’t pass, I will change my plans.”
Opponents of the bill on both sides, including Sen. Sanders, have lambasted it as a “blank check” or “corporate welfare” for the semiconductor industry.
In response to Gelsinger’s statement, Sanders said: “I’m not a lawyer, but what the CEO of Intel is saying to Congress sure sounds like extortion to me.”
“To me, what he is saying is, ‘Oh, our industry loves America. Our industry knows how important this is for national defense, how important it is for the healthcare industry, these sophisticated chips,” Sanders said. “But despite our great love for the country, and the military, if you don’t give us the [$]76 billion, we’re out of here.’”
“Sounds to me like extortion,” he continued. “If I say to you, ‘don’t give me this, you’re in trouble.’ I think the word extortion is not inappropriate.”
Despite their differences on the bill, the House is set to take up the measure following Senate passage, potentially sending the measure to President Biden’s desk by the end of the week.
Spectrum News’ Austin Landis and Ryan Chatelain contributed to this report.
