The ongoing shortage that has impacted everything from vehicles, firearms, washing machines and video games is being addressed by law.
The White House said Wednesday that President Joe Biden will sign legislation next Tuesday to support the U.S. semiconductor industry and advance initiatives to make the United States more competitive with China.
An ongoing shortage that has impacted everything from vehicles, firearms, washing machines and video games is being addressed by law. As the shortfall continues to plague automakers, thousands of automobiles and trucks are still stuck in Southeast Michigan awaiting chips.
The law provides $52 billion in government subsidies for the development and domestic manufacturing of semiconductors, a rare substantial foray into US industrial policy. In addition, it contains a $24 billion investment tax credit for semiconductor factories.
On Tuesday, Biden said, “The law would bolster our efforts to produce semiconductors here in America.”
The law grants $200 billion over ten years to advance American scientific research so that it can compete more effectively with China. To pay for these investments, Congress would still have to pass separate appropriations legislation.
China opposed the semiconductor law through lobbying. China has “firmly rejected it”, according to the Chinese Embassy in Washington, and likened it to a “Cold War mindset”.
Concerns about the scale of public funds given to successful semiconductor companies had been voiced by several progressive MPs.
The Commerce Department announced on Friday that it would restrict the number of government subsidies for semiconductor production and prohibit companies from using the money to “stretch their bottom line.”
Pramila Jayapal, chair of the Congressional Progressive Caucus, said the caucus approved the proposal after lengthy discussions with Commerce Secretary Gina Raimondo. The group had expressed concerns that the cash could be used by chipmakers for share buybacks or dividend payments.
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