Semiconductor chips and circuit board

US Senate advances sweeping semiconductor bill

Image credit: Koldunova Anna |

The US Senate has voted to advance a long-awaited $52bn bill to boost the country's semiconductor industry amid a global chip shortage.

The US took a key step towards reducing reliance on Chinese exports with the advancement of a key bill aimed at boosting the country's chip production. 

The legislation is expected to provide $52bn (£43bn) in incentives for the domestic manufacturing of semiconductors, as well as related research and development projects. It would also provide an investment tax credit for chip plants estimated to be worth $24bn (£19.8bn).

The bill could become law as early as the end of the week, once it obtains final approvals from the Senate and the House of Commons.

The proposed legislation has been praised, not only in terms of economic growth and the trade war with China, but also within the framework of national security. Senate Majority Leader Chuck Schumer called it "one of the most consequential bipartisan achievements of this Congress".

"It's a major step for our economic security, our national security, our supply chains and for America's future," he added. "It will make historic investments to scientific research. It will take direct aim at our nation's chip crisis."

Meanwhile, House Minority Leader Kevin McCarthy and House Minority Whip Steve Scalise have both said they plan to vote against the bill but won't formally whip against it. McCarthy's reported biggest concern with the bill is related to the mandatory spending, he told reporters. 

The Semiconductor Industry Association said the vote is a "vital step toward enactment of legislation that will strengthen American chip production and innovation, economic growth and job creation, and national security".

The chip shortage caused by Covid-related supply chain disruptions, the increase in demand that followed the move to remote working and the ongoing trade war between the US and China is currently affecting many industries that rely on the technology.

As a result of the difficulties in acquiring chips, Apple had to slash its production targets for the iPhone 13 by as many as 10 million units and carmakers including Ford, Jaguar Land Rover, Volkswagen, General Motors, Nissan, Daimler, BMW, Renault and Toyota were forced to shut factories, scale back production or exclude high-end features that relied on semiconductors, such as integrated satellite navigation systems.

Last June, US Commerce Secretary Gina Raimondo warned that the shortage is likely to last through 2023 and perhaps further. 

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