U.S. House approves bill to 'supercharge' chip output, counter China

WASHINGTON — The U.S. House of Representatives passed on Friday a multibillion-dollar bill aimed at increasing American competitiveness with China and boosting U.S. semiconductor manufacturing, despite Republican opposition.

The Democratic-majority House backed the "America Competes Act of 2022" by 222-210, almost entirely along party lines. One Republican joined Democrats in voting for the measure and one Democrat voted no.

Passage set up negotiations with the Senate on a compromise version of the legislation, which must pass both chambers before it can be sent to the White House for President Joe Biden's signature.

The talks could take weeks or months, although Biden urged quick action in a statement praising what he called "vital" legislation.

"Every day we delay we fall farther behind and that increases our domestic national security risk," Commerce Secretary Gina Raimondo said at a news conference.

The vote took place hours after the opening ceremony for the Beijing Winter Olympics, amid criticism in Congress of the International Olympic Committee for awarding the Games to China. Human rights groups have long criticized China's rights record, allegations China denies.

The House bill authorizes almost $300 billion for research and development, including $52 billion to subsidize semiconductor manufacturing and research into the key components used in cars and computers and other electronics. It also has $45 billion over six years to ease supply-chain problems that have exacerbated shortages.

It includes changes to U.S. trade rules intended to offset China's market-distorting trade practices, including by strengthening anti-dumping rules.

The bill would authorize $8 billion in U.S. contributions to the Green Climate Fund, established by the Paris Agreement to combat climate change, to help developing countries cope.

House Speaker Nancy Pelosi told reporters before the vote that she intended to begin negotiations with the Senate quickly.

"It is about making America ... self-sufficient when it comes to the supply chain, so that we're not depending on other countries," she said.

Raimondo said companies had told the administration that without the chips funding they would build manufacturing plants outside the U.S.

Ford Motor Co. thanked House lawmakers on Friday for passing funding for the CHIPS Act -- a provision in the sprawling package that includes the $52 billion to boost U.S. production of semiconductors, with $2 billion allotted for specific chips used by the auto sector.
 
“Ensuring a steady and reliable supply of chips will be vital as we lead the electric vehicle revolution, investing more than $30 billion in electric vehicles through 2025 and electrifying our most popular vehicles, including the all-electric F-150 Lightning heading to customers this spring,” said Steven Croley, Ford’s chief policy officer and general counsel.

“CHIPS funding will help Ford alleviate production constraints caused by the global semiconductor shortage, keep our manufacturing lines humming, and deliver connected and electric vehicles with the exciting features our customers want.”

The American Automotive Policy Council, which represents Ford, General Motors and Stellantis, also applauded the House effort and urged Congress to “quickly work out the differences” between the two chamber’s respective bills.

"No other U.S. industry has been as severely impacted by the shortage of semiconductors as the automotive industry and its workforce,” said Matt Blunt, the council’s president. “It is vital that American automakers and the U.S. manufacturing supply chain have uninterrupted access to semiconductors, which are essential for automotive manufacturing.”

The Semiconductor Industry Association praised the bill.

House Republicans complained that Democrats did not include them in drafting the legislation. They harshly criticized the climate provisions and said they could be used to help Beijing, and accused Democrats of using the China measure to advance parts of Biden's economic agenda that could not pass the Senate.

House Democrats said Republicans had refused to engage with them while they wrote the legislation. Democrats note that their bill includes all or part of more than 60 smaller measures that Republicans had co-sponsored.

The Senate passed its own bill - the U.S. Innovation and Competition Act - by 68-32 in June. Eighteen Republicans joined every Senate Democrat in voting yes. That legislation includes $52 billion to increase domestic semiconductor production and authorizes $190 billion for U.S. technology and research to compete with China.

Audrey LaForest of Automotive News contributed to this report.