Senate Passes $AU74 Billion Chips Bill, Tosses Over to House for Vote

Senate Passes $AU74 Billion Chips Bill, Tosses Over to House for Vote

It’s hard to get the majority of the U.S. Senate to agree on anything, but apparently more than 60% of the upper house of Congress agree that the country could use some more computer chips, $US52 ($AU74) billion worth of chip manufacturing, to be exact.

The Senate passed the CHIPS+ bill 64 to 33 Wednesday afternoon, gathering enough bipartisan support to send it on its way to the House of Representatives where, if everything goes as planned for leading Democrats, it will find itself on President Joe Biden’s desk before early August recess. Earlier this week, the bill managed to make it to the floor for a full vote after passing the 60-vote threshold to beat the filibuster.

CHIPS+, also known as the Chips and Science Act of 2022, would create a new $US52 ($AU74) billion piggy bank for U.S.-based chip manufacturers, including the likes of Intel, Texas Instruments, and Micron Technology. The money’s meant to incentivise the creation of more chip manufacturing in the U.S., but the bill also includes additional provisions to create tax credits meant to spur investment, alongside a new fund meant to encourage innovation.

Critics like Senator Bernie Sanders of Vermont questioned just how much of an incentive these companies needed when they’re already, in his words “some of the most profitable corporations in America.”

Of course, now the bill has to get passed in the House, but leadership within the Democratic Party are hoping for a fast turnaround time. In a statement, Speaker of the House Nancy Pelosi, of California, said the bill’s passage is “a major victory,” and that the federal investments come with guardrails “ensuring they go straight into our economy — not into corporate pockets.”

Though the bill’s meant to aid American-based semiconductor companies, there have been rumblings among some companies that the bill does not aid those companies who design chips, but rely on other companies for manufacturing — including the likes of AMD and Nvidia, to name the two most prominent corporations who won’t see nearly as much aid as companies like Intel, which recently announced its intent to become a true competitor for them in the GPU market.

Of course, the U.S. has a massive hill to climb if it wants to compete with Asia for the chip making crown. Taiwan-based TSMC and South Korean headquartered Samsung together make up the vast majority of the semiconductor field, taking up 53% and 16.3% of the global market share, respectively. In the meantime, China said it plans to invest $US1.4 ($2) trillion in its tech industry, enough to make America’s measly $US52 ($AU74) billion seem like pocket change.

Still, Biden is remaining publicly undeterred, saying in a statement: “For decades, some ‘experts’ said we needed to give up on manufacturing in America. I never believed that.”