US Senate approves $5 billion semiconductor bill

 

The US Senate has approved a bill of 5 thousand 200 million dollars to expand and subsidize the semiconductor sector. After months of discussion, criticism and debate, the bill was approved by the upper house. After another round of upsurges in both chambers, it will be sent to President Joe Biden's desk. If the President signs it, the bill becomes law. News Reuters.

The bill passed the Senate on Monday by a vote of 68-28. Now the bill will be sent back to the House of Representatives and lawmakers will debate it in a formal process known as a conference. Lawmakers from both parties will try to compromise and the bill will be sent back to the Senate for a vote.

On the passage of the semiconductor bill in the Senate, White House spokeswoman Jane Psaki said, "The bill will help strengthen our supply chain, make our own products in America, and compete with China and other countries in the coming decades." We expect the House of Representatives to begin formal conference on the bill soon.

A Democrat lawmaker's assistant said that the House of Representatives will conference soon and the bill will be sent back to the Senate by the end of this week. The bill is expected to receive final approval by summer.

Before the Senate voted on the bill, the House of Representatives also voted on it last February. The Competes Act was approved by a vote of 222-210 in the session of Congress. If the bill, known as the China Competition Bill, becomes law, the US semiconductor manufacturing industry will receive new subsidies.

The Competes Act proposes to provide $5,000 billion to strengthen the U.S. semiconductor sector. Of this, $3,900 billion in subsidies will go directly to new fabrication facilities. Companies that are supposed to get the subsidy are already running factories. TSMC is building a foundry in Arizona at a cost of 1,000 billion dollars. Chip manufacturing in this factory will start in 2024. Meanwhile, Intel has started building a foundry factory in Ohio at a cost of 2 billion dollars.

In the early 1990s, the US market share of the global chip market was 37 percent. In recent years it has stood at 12 percent. East Asia now accounts for 75 percent of global chip production. 90 percent of the most advanced chips are made in Taiwan. The supply chain crisis in the Corona situation and China's policy towards Taiwan have become a cause of concern for the US. President Joe Biden has been emphasizing increasing chip manufacturing capacity since taking office.

Some politicians, like Senator Bernie Sanders, however, oppose subsidizing chip-making companies. They argue that the semiconductor industry is already quite profitable. There is no need for state aid.

Meanwhile, Commerce Minister Gina Raimondo said that setting up a semiconductor factory in the United States is much more expensive than in Asia. If you want to attract chip makers to set up factories in the US, you have to provide them with subsidies. The chip crisis is now not just an economic issue, but a national security issue. High-tech chips are essential for military applications, quantum computing and artificial intelligence (AI) applications.