Joe Biden on Monday called on Congress “as soon as possible” to pass legislation that provides $52 billion to support semiconductor manufacturing in the United States.
“The United States invented semiconductors, but over time we outsourced production,” the American president lamented to representatives of the economy and labor unions. For him, it is “necessary” – for economic reasons as well as national security – that the United States once again manufacture these electronic parts that are present in many items of everyday life.
Demand for these chips exploded during the pandemic, leading to shortages exacerbated by factory shutdowns in China due to a resurgence of COVID-19. In that context, “Congress should pass this legislation as soon as possible,” the Democratic president said.
It is “vital” that it be submitted to the president for ratification “as early as this week,” added his Commerce Secretary Gina Raimondo. “America’s dependence on a small number of factories abroad is dangerous,” National Security Adviser Jake Sullivan also said.
Elected Republicans and Democrats agree on the conclusion, but have been trying to agree on a final text for months. In February, the House passed broader legislation aimed at strengthening US industry in the face of competition from Asia, particularly in the semiconductor sector. A similar bill was passed by the Senate in March. But the two assemblies of Congress could not agree on a joint text. Recently, the Senate began working on a text that is limited exclusively to the issue of semiconductors, called More chips. Last week, he took an important procedural step.
So, more than a year after passing the first version of a bill to increase competition with China in semiconductor production, the US Senate is considering a shortened version of the law. Senate Majority Leader Chuck Schumer called US semiconductor manufacturing a national security issue and a source of jobs. “The message is not subtle: If companies don’t think it’s profitable to make chips here in America, they’re going to go somewhere else,” Schumer said as he opened the Senate last Monday.
In June 2021, the Senate approved a bipartisan $250 billion bill aimed at increasing spending on research and technological development, one of the first major pieces of legislation passed since Democrats took tight control of the upper chamber, Reuters reported.
However, the Democratic-controlled House of Representatives, which passed its own bill earlier this year with little to no Republican support, never took notice. The measure included provisions to boost chipmakers, as well as billions of dollars for other supply chains and the Global Climate Change Initiative, which Republicans oppose.
Semiconductors are ubiquitous in everyday life. Produced mainly in Asia, they are needed in the production of cars, smartphones and medical equipment, among others. With the pandemic, manufacturers have watched those chip stocks melt to alarming levels.