Congress ratifies CHIPS act

Congress ratifies CHIPS act

The long-awaited CHIPS-Plus Act finally passed through the Senate lasy week as the semiconductor subsidy measure amassed 64 votes in favor to beat 33 against. Trade groups representing manufacturers and semiconductor companies hailed the bill’s passage to the House of Representatives as a vital step toward bolstering the domestic supply of computer chips.

Staff members for Senator Chuck Schumer (D-N.Y.), one of two co-sponsors of the original bill, claimed that the latest version of the bill contains $52 billion in funds for semiconductor manufacturers to use building or improving existing semiconductor factories, workforce training, wireless broadband development, and regional economic development hubs. They also revealed that the bill includes a 25% credit for companies investing in semiconductor fabricators, or fabs, in the United States.

“This bill means lowering costs for families, solving our nation’s chip shortage, strengthening our national security, and bringing manufacturing back from China to Upstate New York,” declared Schumerin a press release.

In prepared remarks, Young portrayed the bill as being a strike against China’s own investments, noting that China “is currently investing $1.4 trillion in frontier technologies that will dominate the 21st century” and confidently predicting that the bill would enable the U.S. “to go on the offensive.” Young also noted that chip shortages forced General Motors’ assembly plant in Fort Wayne, Indiana, to temporarily halt production on two occasions.

The bill’s passage from the Senate to the House—where it is expected to pass quickly, thanks to bipartisan support and an impending August recess—inspired positive reactions from trade groups and the United Auto Workers.

Semiconductor Industry Association CEO John Neuffer praised the Senate for its “decisive progress towards strengthening America’s economy, national security, and leadership in the key technologies of today and tomorrow” before urging the House to send the bill to the President’s desk quickly to finalise the process.

Jay Timmons, CEO of the National Association of Manufacturers, echoed hopes the bill will improve U.S. competitiveness and called for further action on items left out of the final version of the bill.

“This bill will help strengthen American supply chains thanks to its investments in domestic semiconductor production,” Timmons said in a statement before pledging to work with Congress on items struck from previous iterations of the bill, such as an anti-counterfeiting measure.

UAW President Ray Curry’s response to the bill was similar but he also warned that the bill did not represent a silver buller and that there was more work still to be done, saying “The ongoing shortage of auto-grade semiconductors is an example of what happens when our country fails to invest in U.S. manufacturing and secure our supply chains,” Curry said in a statement. Yet, he said, the union had hoped to see the final bill include a reauthorization of the Trade Adjustment Assistance provision, which provided benefits to workers who lose their jobs due to the impacts of offshoring.”


For critics of the bill the sticking point is invariably its price tag with the CHIPS-Plus Act expected to cost the U.S. government $79.3 billion over the next ten years, according to data released by the Congressional Budget Office.