Senate edges US chip world closer to $50b subsidies

Now for lawmakers to wrangle over the fine print

The US Senate this week advanced the America COMPETES Act by a bipartisan 68-28 vote, moving more than $50 billion in semiconductor industry funding closer to President Biden's desk. 

The America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (COMPETES) Act of 2022 mainly focuses on subsidies for scientific research and growing the US semiconductor manufacturing industry in a bid to improve the nation's chip design prowess, increase supply-chain resiliency, and stave off another semiconductor shortage

At more than 2,300 pages in length, the bill definitely has its fair share of riders, too: around 29 pages of items with reduced or suspended import duties, largely good news for Chinese companies, for example. Additional elements of the bill that favor China include addressing "diplomatic, security and other foreign relations matters."

There are some significant differences between the House and Senate versions of the bills, which will now have to be reconciled in conference before being sent to President Biden to be signed into law.

Regardless of what changes, the White House signaled its intent to support the draft law when Press Secretary Jen Psaki issued a statement praising its passage in the Senate on Monday.

"The Senate took another step forward today in delivering on the President's vision to strengthen our supply chains, make more in America, and outcompete China and the rest of the world for decades to come," Psaki said. 

She added that the House and Senate bills are in line with President Biden's agenda of boosting domestic manufacturing and innovation while addressing supply chain bottlenecks. The House version, the America COMPETES Act, passed that half of Congress in February. The Senate version, the United States Innovation and Competition Act, passed the Senate last year. Now the Senate has sent both bills into the reconciliation process.

The Senate's text describes its specific goals as not only funding semiconductor production, but also includes provisions that:

Critical sector supply-chain resilience; energy and wireless communications tech; and natural resource conservation are all also covered by elements of the bill. All in all, the funding and policy changes come down to making it easier for US companies to compete, both domestically and abroad. 

Where the chip money will go

The specifics for the semiconductor industry come in the form of the CHIPS for America Fund, which the bill doesn't create but provides cash for: CHIPS was established in the 2021 National Defense Authorization Act.

CHIPS creates funding for private companies to construct semiconductor fabs, as well as for businesses that want to expand or modernize their existing fabrication capabilities. Funding is also provided for the creation of a Manufacturing USA Institute operated by NIST for the purposes of developing semiconductor education programs, testing new chip assembly and packaging methods, and research virtualization and automation of semiconductor machinery maintenance. 

Funding for CHIPS distributes $50.2 billion between FY 2022 and FY 2026. The construction of semiconductor fabs is notoriously slow and expensive, and while the COMPETES Act may establish a course, it could take several years to see results in the form of chip supply chain resilience. ®

Send us news

Biden admin fuels up Rocket Lab with $24M for space-grade solar cell chip shop

Funding will expand manufacturing by 50% in three years, says Uncle Sam

White House hopes $180M will solve science, tech gaps in commercial fusion power

Researchers get 4 years, a small pot of cash, and long row to hoe before making tech practical by next decade

Malaysia stakes claim to become semiconductor superpower by luring $100B investment from … somewhere

Suggests itself as the place to do high-end manufacturing without upsetting anyone

Korea's SKC gets $75M in CHIPS change for US-based glass substrate plant

Set up as a gamble, the Absolics subsidiary has just paid off

China creates $47B chiptech investment fund

Third 'Big Fund' is close to the level of US and EU subsidy programs

Brit tech tycoon Mike Lynch cleared of all charges in US Autonomy fraud trial

Jury in San Francisco finds founder plus finance VP not guilty

STMicro bags €2B from Europe for Sicily car chip fab

Eurocrats made them an offer they couldn't refuse

How's Uncle Sam getting on with Biden's AI exec order? Pretty good, we're told

Former Pentagon deputy CIO Rob Carey tells us guardrails should steer Feds away from bad ML

ASML and Imec unveil pricy High NA EUV playground for chipmakers

Because who doesn't love a $373M toy?

Intel CEO says sanctions on China squanders opportunity for US chipmakers like Intel

When the Middle Kingdom starts making its own processors, it won’t buy ones made by me!

Samsung workers treated for exposure to radiation in South Korea

Workplace safety org identifies 26 hazards in the chipmaking process

Intel interrupts work on $25B Israel fab, citing need for 'responsible capital management'

Won't say when build might resume