On July 27, the US Senate finally passed the much-heralded CHIPS Act, a bill that will pave the way for government subsidies for the production of high end semiconductors. There was rare bipartisan 64-33 support for the US$280 billion ($387 billion) legislation that could help America build up critical tech capacity to help boost its economy and national security.
The landmark bill is probably the most important piece of US legislation that will pass both houses before the November’s midterm elections that the Republican Party is poised to win — taking control of both the chambers ahead of the 2024 presidential elections in which former President Donald Trump will likely be on the ticket. The Biden administration was able to push the legislation through with some Republican support despite vociferous opposition from the progressive wing of his own party. Senator Bernie Sanders, for example, has called the bill “a blank check” for the cash rich semiconductor industry.
The CHIPS Act (short for the Creating Helpful Incentives to Produce Semiconductors for America Act) would set aside US$52 billion in subsidies — US$39 billion for investment in chip foundries for advanced technology, US$2 billion of subsidies US chip industry and US$11 billion for investment in chip R&D and workforce development.