The Senate on Wednesday passed a historic bipartisan bill to expand the domestic semiconductor industry amid a worldwide shortage of the crucial computer part.
The legislation became a political football in recent years despite widespread agreement among lawmakers that America's reliance on foreign manufacturers had contributed to a shortage of chips that slowed production across industries, particularly for automobile and electronics firms.
One major theme among supporters was the need to compete with China for high-tech production — though China remains a smaller player compared to other Asian nations such as South Korea and Taiwan. As the Congressional Research Service noted, nearly four-fifths of global fabrication capacity is currently in Asia, where COVID lockdowns put a dent in output.
The latest version of the so-called CHIPS Act was passed by a vote of 64-33 and is now headed to the House, where it is expected to pass with bipartisan support. The bill provides $52 billion in funding for developing manufacturing capacity in the United States and also provides a suite of tax credits and incentives for companies to locate their facilities within the country.
The legislation caps off at least two years of public debate and advocacy around domestic chip manufacturing, which has already spurred action among chip-makers, including a $20 billion investment from Intel to build a semiconductor production hub in Ohio.
The Biden administration commended the bill's passing after using the bully pulpit in recent months to press Congress to reconcile their differences. President Joe Biden said the bill offered one solution to the combined problems of inflation and supply chain bottlenecks.
"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 said in a statement from the White House.
The administration also highlighted the bill's potential to create well-paying tech jobs.
"Our country runs on semiconductors and creating a robust chip manufacturing ecosystem in the U.S. will keep our economy strong, our nation safe, and create high-quality, good-paying jobs in communities across the country," said Commerce Secretary Gina Raimondo in a statement.
House Speaker Nancy Pelosi, (D-Calif. 12th District) expressed confidence that enough of both Republicans and Democrats will support the bill to get it passed. Independent Sen. Bernie Sanders notably broke with Democrats, calling the bill "corporate welfare."