The U.S. Senate voted 64-33 Wednesday to approve a $280 billion piece of legislation that will dole out a batch of chip manufacturing subsidies and research funding that’s designed to return chip production to the U.S. in some meaningful fashion.
The vote likely marks the end of more than two years of debate, which stalled in recent weeks amid disagreements between the two houses of Congress and within parties. The Senate bill is now set to travel to the House and is expected to pass there, according to several D.C. insiders Protocol spoke with this past week. If or when the House passes the bill, it will head to President Biden, who has signaled he supports this effort to boost U.S. chip manufacturing and plans to sign the bill.
The semiconductor manufacturing-related legislation the Senate passed is a reworked version of the House's bill that strips out some of the components that bogged down passage in favor of ensuring the chip-related funding passes.
Broadly, the Senate version includes roughly $52 billion in subsidies to bolster chip manufacturing in the U.S., spread over five years, and a $24 billion tax credit to support the industry. Beyond the manufacturing subsidies, the bill also adds $200 billion marked for research.
The legislative package is a meaningful sum of money, but for the chip industry, which measures the cost of its future plans in the tens or hundreds of billions of dollars, $52 billion over five years is “a rounding error given the scale of investments required in this space,” according to Bernstein analyst Stacy Rasgon. The funding and tax breaks will directly benefit chip manufacturers such as Intel, GlobalFoundries, Samsung and TSMC.