WASHINGTON — The U.S. Senate on Wednesday passed a bill that, in part, will provide billions of dollars to boost domestic semiconductor production — an action long-awaited by the auto industry as it continues to navigate a global shortage of microchips.
The bipartisan bill — known as the CHIPS and Science Act or "CHIPS-plus" — provides about $52 billion in government subsidies for U.S. semiconductor research, design and production, including $2 billion for "legacy chips" used by automakers and parts suppliers.
It also includes a 25 percent tax credit for investments in semiconductor manufacturing through 2026 and invests billions of dollars in science and technology innovation to strengthen economic growth, job creation and national security.
The legislation, approved 64-33 with a bipartisan vote, now heads to the U.S. House of Representatives, where it is expected to pass as early as this week.
The bill is a trimmed-down version of legislation previously passed by the Senate and House to address the global semiconductor shortage and other supply chain disruptions. That legislation also sought to improve U.S. competitiveness with countries such as China, Taiwan and South Korea, as well as the European Union, which are all investing in semiconductor manufacturing.
Funding for the CHIPS — or Creating Helpful Incentives to Produce Semiconductors for America — Act was included in the U.S. Innovation and Competition Act that was passed by the Senate in June 2021 and in the House's version that was passed in February.
Members from both chambers had been working in recent months to iron out differences between the two versions and pass a bill before lawmakers leave for August recess but have yet to agree on a final, broader economic competitiveness package.
The legislation passed Wednesday has been slammed by some critics, including Sen. Bernie Sanders, a Vermont Independent, who has called it a "blank check to the microchip industry."
Republican Sen. Pat Toomey, of Pennsylvania, last week referred to the bill as a "corporate welfare handout" to "an extremely sophisticated, profitable industry in the U.S. — semiconductor manufacturing."