The U.S. Senate voted to pass a stripped-down chip bill to promote U.S. competition with China in the semiconductor industry.
The bill crossed a key legislative process with a 64-34 vote on Tuesday night; MPs are still working through the details of the legislation.
The bill would provide regarding $50 billion in subsidies to support the manufacture of computer chips in the United States, a multi-faceted bipartisan effort that combines the interests of committees ranging from national security to the economy.
After the Senate votes to pass the procedure on Tuesday, a final vote will be held this week or early next week. The bill will then go to the House of Representatives for a vote and finally to the Biden table for signature into law.
The ultimate goal of the legislation is to incentivize the production of semiconductors within the United States to reduce reliance on Asian manufacturers.
Biden administration officials have said developing a U.S. homegrown chip industry would help mitigate supply chain disruptions that have hampered economic recovery from the pandemic and insulate the U.S. from supply chain lines dominated by political rival China.
Bills to be voted on in the Senate include $52 billion to rebuild domestic chip production and tax cuts to encourage U.S. factories. Chip stocks rose ahead of the vote on Tuesday (19th), with Intel (INTC-UIS) up 3.9% and huida (NVDA-US) rose 5.5 percent, and Texas Instruments (TXN-US) rose 3.1%, both beating the S&P 500’s 2.8% gain.
More than a year ago, the Senate approved for the first time in a bipartisan vote a $250 billion bill to strengthen U.S. chip manufacturing and revive U.S. research and development. But the House never tried the bill.
House Democrats have drafted their own version of the China Competition Act, with a more dovish national security tone and a greater emphasis on climate change funding. Republicans oppose the bill.
Democrats in both chambers have been trying to reconcile the differences between the two versions for months. But with annual inflation above 9 percent and a difficult midterm election, the Biden administration has said it will simplify the bill to expand chip production.
It is uncertain whether Senate Democrats will get the 60 votes needed to complete the final legislation. This requires the support of several Republicans.
