By Casey Smith
Indiana Capital Chronicle
INDIANAPOLIS – A bill to bolster the manufacturing of semiconductor chips in the United States won Senate approval Wednesday after being championed by Indiana Republican Sen. Todd Young for several years.
U.S. Senators voted 64-33 in favor of the bipartisan-backed bill, which now advances to the U.S. House of Representatives. The measure is expected to pass in that chamber, too, with some Republican support.
President Joe Biden has backed the package for more than a year and could sign it into law as early as this week.
“It’s time to go on the offensive, and that is exactly what this legislation, which has gone by many names – from the Endless Frontier Act to the U.S. Innovation and Competition Act to CHIPS-Plus – will do,” Young said in a statement Wednesday.
“This bill will unleash private sector innovation while significantly boosting federal national security investments. It’s been a long journey to get to this point, but history will show that by passing this bill, we are confronting the challenges of today and building a prosperous and secure tomorrow for all Americans.”
What the bill would do
The CHIPS bill, short for Creating Helpful Incentives to Produce Semiconductors for America Act, seeks to bolster domestic manufacturing of semiconductor chips that are used to power the nation’s smartphones, cars, computers, medical equipment, military weapons and other technology.
If passed, Young’s proposal is expected to pave the way for the construction of new factories across the country, along with tens of thousands of jobs.
The legislation would provide $54 billion in grants for semiconductor manufacturing and research, in addition to tens of billions to support regional technology hubs.
A tax credit covering 25% of investments in semiconductor manufacturing through 2026 is also included in the proposal.
The bill would additionally authorize roughly $100 billion in spending over five years on scientific research. That includes more than $80 billion for the National Science Foundation.
Gov. Eric Holcomb lauded the bill’s success on Wednesday, noting that “semiconductors must be our first objective” if the U.S. “wants to be a leader in 21stcentury industries.”
“The U.S. Senate just passed once-in-a-generation legislation that invests in American technology to keep our country safe from any and all of our adversaries,” Holcomb said in a statement. “The U.S. House of Representatives should quickly pass the CHIPS Plus legislation to keep America in the fast lane of the technology race and boost our country’s competitiveness globally.”
SkyWater, a major supplier of semiconductors to the Department of Defense, in partnership with Purdue University, announced last week a 600,000-square-foot semiconductor research and development production facility in West Lafayette.
The Republican governor emphasized that the company’s ability to “make an investment of this magnitude” is reliant upon the passage of Young’s bill.
“This exact legislation also invests in research at our great universities, workforce programs and tech-hubs tailor-made for our state,” Holcomb said.
Bill passage could mean less U.S. dependence on China
A shortage of semiconductor chips during the coronavirus pandemic led to price hikes and supply-chain disruptions, including in Indiana.
Supporters have argued the legislation is now a much-needed response to help the U.S. compete on the global stage and lower its reliance on China for semiconductor production.
Opponents, including Sen. Bernie Sanders (I-Vt.), have criticized the bill, saying it gives “blank checks to profitable microchip companies,” like Intel Corp. and Micron Technology.
Nearly 80% of global fabrication capacity for computer chips was in Asia as of 2019, according to the Congressional Research Service. The United States used to make 40% of the world’s chips but now makes about 12%.
Young first introduced the legislation in 2020 and has been working to pass it since then.
The Indiana Capital Chronicle is an independent, nonprofit news organization dedicated to giving Hoosiers a comprehensive look inside state government, policy and elections.
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