Congress asks Biden Administration to fund CHIPS Act

13 April 2021

Members of Congress sent a letter to the Biden Administration to prioritize funding to implement the initiatives authorized in the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, a provision of the National Defense Authorization Act (NDAA) that would increase U.S. semiconductor production.

The letter, signed by 23 U.S. Senators and 42 House of Representatives members, which includes signatures from both Republicans and Democrats, came as U.S. President Joe Biden held a meeting with executives from major electronics companies including Intel to address the ongoing semiconductor shortage currently impacting the world’s production industries, specifically the automotive industry, which is struggling to keep up with demand.

Congress asked the Biden Administration to join in support of the funding for domestic U.S. semiconductor manufacturing to compete with China and to strengthen America’s economic competitiveness and resiliency as well as national security.

“The United States cannot wait to provide these resources over the years ahead,” the Congressional letter said. “The halted production lines for consumer technology, auto manufacturers, truckers and other critical industries due to a semiconductor shortage further highlights the pressing need to act quickly and fund the enacted bipartisan provisions.”

The letter specifically called for the administration to move swiftly to fund the CHIPS Act so it can be implemented and address the current supply-chain vulnerabilities that threaten national and economic security as well as help America become competitive in the semiconductor manufacturing industry.

The CHIPS for America Act, which was introduced last year to the U.S. Senate by Sen. Mark R. Warner (D-VA), vice chairman of the Senate Select Committee on Intelligence, and Sen. John Cornyn (R-TX), features legislation that would create a 40% refundable investment tax credit for qualified semiconductor equipment or any qualified semiconductor manufacturing facility investment expenditures through 2024. It would also direct the Secretary of Commerce to create a $10 billion federal match program that matches state and local incentives offered to a company for building a semiconductor foundry with advanced manufacturing capabilities. Funding would also be allotted for R&D investments and other funding to increase the engineering workforce.

Congress said the CHIPS Act would help Biden’s Build Back Better initiative to restore critical supply chains on U.S. soil and create high-paying jobs, developing talent pipelines for American workers and increasing technological innovation.

“In addition to enabling sustainable economic growth today, funding the CHIPS provisions is a top national security priority,” the letter said. “The Chinese Communist Party (CCP) has aggressive plans to reorient and dominate the semiconductor supply chain, pouring over $150 billion in semiconductor manufacturing subsidies and investing $1.4 trillion in their efforts to become the dominate global technological power. Even full funding of the originally filed CHIPS provisions pales in comparison to the investments being made by the CCP, which speaks to why consideration of an even higher level of funding is worthwhile.”

During Biden’s meeting with electronics’ makers, he urged Congress to invest $50 billion in semiconductor manufacturing and research as part of a broader focus on restoring the U.S. to a manufacturing powerhouse.

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