Majority Of U.S. Senate Backs Bill Boosting Chipmakers, To Compete With China

A majority of the U.S. Senate on Wednesday backed sweeping legislation to subsidize the domestic semiconductor industry, hoping to boost companies as they compete with China and alleviate a persistent shortage that has affected everything from cars to washing machines.

As voting continued, the Senate backed the bill by 57 to 31, exceeding the 51 votes needed for passage. The House of Representatives is expected to approve it as soon as later this week, sending it to President Joe Biden for his signature.

The long-awaited "Chips and Science" act provides about $52 billion in government subsidies for U.S. semiconductor production as well as an investment tax credit for chip plants estimated to be worth $24 billion.

The legislation would also authorize more than $170 billion over five years to boost U.S. scientific research efforts to better compete with China. Congress would still need to pass separate appropriations legislation to fund those investments.

"This legislation is going to create good paying jobs, it will alleviate supply chains, it will help lower costs, and it will protect America's national security interests," the Senate's Democratic majority leader, Chuck Schumer, said urging support for the bill.

Most of the funding approved on Wednesday was expected to fund new factories, but these will take two or three years to complete once construction begins. Boeing Co said Wednesday it still faces supply chain issues from chips shortages.

General Motors Co said Tuesday it had more than 90,000 unfinished vehicles, mostly high-margin trucks and SUVs, waiting for chips and other parts. Thousands are parked in southeast Michigan.