US Senate Approves Revised Chip Subsidy Legislation

The US Senate approved the legislation that should help the nation better compete against China by boosting the domestic production of semiconductors. The revised version of the plan unveiled in 2020 now facing one last hurdle before being presented to President Joe Biden for final approval.

A majority of senators approved the CHIPS and Science Act, originally dubbed CHIPS for America Act, paving the way for a vote by the House of Representatives. From there, President Biden would face a ticking clock to sign it into law because Congress adjourns in early August. The bill includes subsidies of around $52 billion to boost US semiconductor production and an estimated $24 billion investment tax credit for chip plants.

The CHIPS and Science Act also authorizes more than $170 billion over five years to spur the innovation and development of other US technologies, though Congress still needed to pass separate funding approvals for these elements. In 2021, the Senate approved the original $250 billion bill for the domestic chip industry, but the House of Representatives never voted on it. The delay reportedly led to Intel halting work on a new factory and TSMC predicting longer construction times on one of its sites.