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U.S. Senate tries again on computer chip bill to compete with China

WASHINGTON, July 19 (Reuters) – The U.S. Senate is set to vote Tuesday on a slimmed -down version of legislation that would provide $ 52 billion in subsidies and tax credits for the computer chip industry, more than a year after pass the first version of a law that increases semiconductor competition in China.

The bill is part of U.S. efforts to address the industry -wide chip shortage that has hampered production in the automotive and electronics industries, forcing some companies to lower production.

Senate aides say the bill would include a new, four-year 25% tax credit to encourage companies to build plants in the United States in response to growing calls to reduce the reliance of other countries for semiconductors.

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Democratic leader in the Senate majority, Chuck Schumer, announced that a first round of voting will take place on Tuesday, calling for making the U.S. semiconductor a matter of national security as well as a source of jobs.

Senate aides said the goal is to pass the bill early next week. They will then send the bill to the House of Representatives, whose approval will send it to the White House for President Joe Biden to sign the law.

“The message isn’t subtle: If companies don’t think it’s worthwhile to make chips here in America, they’re going somewhere else,” Schumer said in his opening remarks in the Senate on Monday.

Many large weapons also require sophisticated computer chips. The Javelin missile system developed by Raytheon Technologies (RTX.N) and Lockheed Martin Corp each has 250 microprocessors. These systems were as demanded by the Ukrainian military as they worked to repel the Russian invasion of Ukraine.


Intel Corp. (INTC.O) said in January it would spend $ 20 billion on an Ohio factory after demolishing two new plants in Arizona last year. That could grow to $ 100 billion with eight total fabrication plants and is the largest investment on record in Ohio, Intel Chief Executive Pat Gelsinger said in January.

However, he added that without government funding, “it won’t happen that fast and it won’t grow that fast.”

Administration officials urged lawmakers last week to pass the bill, citing other issues of concern about national security.

The current bill is a pared-down version of rival Senate and House of Representatives bills that were stalled before becoming law, even if support for improved competition in China is one of some parts of the agreement. between Biden’s Democrats and Republicans.

The Senate approved a bipartisan $ 250 billion bill that would increase spending on research and technology development in June 2021, one of the first major pieces of legislation passed after Democrats gained their little control over camera.

However, the legislation never got into the Democratic -controlled House, which earlier this year passed its own bill with almost no Republican support. That move includes provisions to boost chipmakers, but also billions of dollars for other supply chains and the Global Climate Change Initiative, which Republicans oppose. read more

Urged by the administration to do something, lawmakers have recently begun working more urgently on streamlined legislation targeting semiconductors.

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Reporting by Patricia Zengerle; Edited by Leslie Adler and Josie Kao

Our Standards: The Thomson Reuters Trust Principles.

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