In an unexpected development on Thursday, the U.S. House of Representatives voted to pass the $52 billion CHIPS Act, which now goes to the desk of President Joe Biden to be signed into law.
The House also approved an additional $230 billion dollars to be made available to both the semiconductor industry and scientific researchers over the next 10 years, including The National Science Foundation. Legislators believe the additional funds will create more U.S.-based high-tech jobs to become more competitive with China. The House and Senate spent the last year working to create a competition package that satisfied both sides of the aisle.
Semiconductor manufacturer GlobalFoundries lauded the House for passing the CHIPS bill, called Creating Helpful Incentives to Produce Semiconductors. GlobalFoundries CEO Thomas Caulfield believes it "levels the playing field for competitive semiconductor manufacturing in the U.S."
"Congress took action to protect U.S. economic, supply chain and national security by accelerating semiconductor manufacturing on American soil," he said in a prepared statement.
Mark Granahan, CEO of chip design company Ideal Semiconductor, said the company is glad to see the progress with passage of the CHIPS Act. Granahan said he hopes to see funding spread evenly among chip manufacturers, including midsize chip foundries he said are "critical to many startup companies and defense applications."
"Our hope is that the CHIPS Act is a step one in a series of well-planned initiatives that will guide the chip industry to resurgence on U.S. soil," Granahan said.
Chipmakers such as Intel began to pressure Congress to pass the CHIPS Act specifically, threatening to delay plans to build U.S. chip manufacturing facilities without the guarantee of federal funding.
Experts said moving forward with the CHIPS Act will address concerns such as national security, as only 12% of global chip production occurs in the U.S. A majority of semiconductor chip production takes place in countries like China, Taiwan and South Korea, and the chips are used to power devices such as cars, phones and laptops. The U.S.'s lack of domestic chip production has become more apparent amid a global semiconductor chip shortage.
Initially proposed by the Senate last year, the $52 billion CHIPS Act was originally included as a piece in a larger $250 billion China competition bill, the U.S. Innovation and Competition Act. The legislation stalled, however, as Republicans and Democrats fought over provisions in the competition package to boost technological and scientific competition with China, with the House eventually proposing its own version of a competition bill. The House and Senate spent the last year trying to reconcile differences between the two bills.
As Editor At Large with TechTarget's News Group, Ed Scannell is responsible for writing and reporting breaking news, news analysis and features focused on technology issues and trends affecting corporate IT professionals.
Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.