It’s been a year since the US Senate passed sweeping legislation to encourage semiconductor manufacturing in the United States, and six months since the House passed a broader version of the bill. Discussions about a version that could be supported by both chambers have been bogged down by politics and process — even though Democrats and Republicans agree that semiconductor funding is vital to our nation’s economic and national security interests.
With the August recess coming up and the fall dedicated to campaigning, there is no time to waste. Congress, just do it.
There was some progress last week – we hope.
Senate Majority Leader Chuck Schumer, D-New York, is ready to schedule a vote on a slimmed-down version of the bill, the CHIPS Act, which provides $52 billion for semiconductor research and manufacturing. The “skinny” bill leaves out some priorities added by House Democrats that Senate Republicans won’t support.
On Tuesday, the Senate voted 64-34 to advance a “CHIPS plus” bill that also includes tax incentives for chipmakers and funding for science initiatives. If the stars align, the bill could come up for a vote this week.
Skinny, plus-sized or otherwise, Congress needs to pass the CHIPS Act. Otherwise, the consequences will be quick. Intel CEO Pat Gelsinger told the Washington Post that the company will delay building a chip fab in Ohio and move plans for its next factory to Europe, which has already approved subsidies.
Why is this bill so important?
Semiconductors are in almost everything, but only 12% of them are made in the United States. Most of the chips are made in China, Taiwan and South Korea, which heavily subsidizes the industry. The Covid-19 pandemic has created chip shortages that have hampered US manufacturers and the military, exposing the fragility of supply chains. A lack of chip manufacturing capacity makes the US vulnerable to disruptions caused by trade or geopolitical disputes. Lack of funding for research is handing over the future to our economic rivals – as well as high-paying, highly skilled jobs in industry.
Central New York also has a selfish reason to want this bill passed. The region is asking for more chip fabs for a site in Clay. In June, the New York state Legislature authorized $10 billion in tax credits over 20 years to promote the growth of “green” semiconductor manufacturing projects – a move that Onondaga County said Executive Ryan McMahon needed to attract high-cost companies to the state of New York.
Federal CHIPS legislation is the final piece of the puzzle. We call on Congress to pass it without delay.
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