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U.S.: USD 52 BILLION CHIPS BILL

Context

The United States Senate has approved a plan to provide USD 52 billion in subsidies for semiconductor chip manufacturing in the United States. The 68-28 procedural vote sends the bill back to the House of Representatives, kicking off a lengthy process that will eventually lead to a formal "conference" in which legislators from both chambers try to reach an agreement on a compromise version.

Key Points

  • The industry-wide chip shortage has also affected the electronics and automobile industries.
  • As a result of the scarcity, some businesses have reduced their output.
  • In the United States, there is a growing desire to reduce the country's reliance on foreign semiconductor chips.

About the bill

  • The Senate first enacted the chip law in June, along with a USD 190 billion authorization to expand the country's research and technology facilities to compete with China. 
  • The House of Representatives passed its version of this bill in February. 
  • The bills propose various approaches to improve the US's competitiveness with China on a variety of issues, including trade and climate policies. 
  • The Senate's decision was yet another step toward strengthening the country's supply chains, increasing output in the United States, and outperforming China and the rest of the world.

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