The U.S. Senate voted 64-32 to advance legislation to boost U.S. semiconductor manufacturing in a bid to make the domestic industry more competitive with China.
Global semiconductor sales reached $556 billion (+26.2 percent) in 2021, and U.S. semiconductor companies accounted for sales totaling $258 billion, or 46 percent of the global market.
U.S. semiconductor firms invested $50 billion in R&D, the highest in history, to remain competitive in the industry, according to the Semiconductor Industry Association (SIA) report released earlier.
The proposed legislation provides about $52 billion in government subsidies for U.S. semiconductor production as well as an investment tax credit for chip plants estimated to be worth $24 billion, news reports said.
The Senate is expected to vote on final passage in coming days and the U.S. House could follow suit as soon as later this week.
US President Joe Biden and others have cast the issue in national security terms, saying it is essential to ensure U.S. production of chips that are crucial to a range of consumer goods and military equipment.
Commerce Secretary Gina Raimondo called the vote a symbol of the strong bipartisan coalition working to build more chips in America. These chips keep our economy strong and our country safe.
The bill aims to ease shortage that has dented production in industries including automobiles, consumer electronics, medical equipment and high-tech weapons, forcing some manufacturers to scale back production. Auto production has been especially hit hard.
Semiconductor Industry Association (SIA) said the vote is a vital step toward enactment of legislation that will strengthen American chip production and innovation, economic growth and job creation, and national security.
Joe Biden pushed hard for the bill, which has been in the works for over a year, with a version passing the Senate in June 2021 but stalling in the House. This frustrated lawmakers from both parties who view competition with China and global supply chain issues as top priorities.
Critics like Senator Bernie Sanders have called the measure a blank check to highly profitable chips companies.