The Senate voted to advance a slimmed-down version of its bill designed to boost U.S. semiconductor competition with China. The bill cleared a key procedural hurdle Tuesday evening in a 64-34 vote, even as lawmakers worked to finish various sections of the legislation.
The centerpiece of the legislation is $52 billion to rebuild domestic chip production and tax breaks to encourage the construction of plants based in the U.S. The Senate’s procedural step forward paves the way for the upper chamber to hold a vote on final passage later this week or early next week, notes CNBC. The bill would then go to the House.
The broadest aim of the legislation is to incentivize semiconductor production within the U.S. to decrease dependence on Asia-based manufacturers. Administration officials say a larger domestic chip industry would help ease the supply chain disruptions that have hampered the economic recovery from COVID and insulate the U.S. from supply route shortages.
A global chip shortage over the past two years rippled through several industries, including mobile phone, automakers and consumer technology companies and defense systems manufacturers. Sen. John Cornyn (R-TX) is lead author of the Senate’s original text, notes CNBC. He stressed the economic implications of the bill in Twitter posts. “If the U.S. lost access to advanced semiconductors (none made in [the U.S.] in the first year, GDP could shrink by 3.2 percent and we could lose 2.4 million jobs,” he wrote. “The GDP loss would [be] 3X larger ($718 B) than the estimated $240 B of U.S. GDP lost in 2021 due to the ongoing chip shortage.”
By Leslie Stimson, Inside Towers Washington Bureau Chief
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