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US Senate approves $52 billion chips bill in a bid to reach a compromise

Illustrative image of semiconductor chips on a circuit board
Semiconductor chips are seen on a circuit board of a computer in this illustrative image taken on February 25, 2022. REUTERS/Florence Lo/Illustration

March 29, 2022

By David Shepardson

WASHINGTON (Reuters) – The U.S. Senate on Monday again approved a bill providing $52 billion in U.S. subsidies for semiconductor chip manufacturing, seeking a compromise after months of discussions.

The procedural vote of 68-28 sends the legislation back to the House of Representatives in a circuitous process, eventually beginning a formal process known as a “conference” in which lawmakers from both houses seek agreement on a compromise version.

A persistent industry-wide shortage of chips has disrupted production in the automotive and electronics industries, forcing some companies to scale back production, and calls to reduce reliance on other countries for semiconductors have mounted.

The Senate first passed a chip bill in June that also authorized $190 billion to boost US technology and research to compete with China, while the House of Representatives passed its version in early February.

The bills take different approaches to address US competitiveness with China on a variety of issues, as well as trade and some climate provisions.

Senate Commerce Committee Chair Maria Cantwell said the vote was critical to “getting us into real negotiations.”

White House spokeswoman Jen Psaki said the Senate vote is another step “to strengthen our supply chains, produce more in America, and outperform China and the rest of the world for decades to come.” We look forward to the House of Representatives moving quickly to start the formal conference process as well.”

A senior Democrat adviser in the House of Representatives said the chamber would take up the measure and send it back to the Senate later this week. The Senate must vote again to start the conference. A final agreement may not be reached until summer.

Independent Senator Bernie Sanders has criticized the $52 billion in subsidies, calling it “corporate greed” and saying taxpayers should receive warrants or equity from profitable chip companies in exchange for subsidies.

“The financial gains of these companies must be shared with the American people, not just wealthy shareholders,” Sanders said.

US Secretary of Commerce Gina Raimondo noted that two decades ago the United States produced nearly 40% of all chips, while today it accounts for just 12% of global production. The Senate vote brought the United States “one step closer to revitalizing American semiconductor manufacturing, securing our critical supply chains, and creating quality manufacturing jobs.”

On Friday, General Motors announced it would halt production at a pickup plant in Indiana for two weeks in April due to a chip shortage.

(Reporting by David Shepardson; Editing by Leslie Adler)

https://www.oann.com/u-s-senate-approves-52-billion-chips-bill-in-bid-to-reach-compromise/?utm_source=rss&utm_medium=rss&utm_campaign=u-s-senate-approves-52-billion-chips-bill-in-bid-to-reach-compromise US Senate approves $52 billion chips bill in a bid to reach a compromise

DUSTIN JONES

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