Congress to meet regarding CHIPS for America Act

10 May 2022

Members of Congress are planning to meet this week in order to hammer out details for a final version of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act.

The Senate passed the bill in June of 2021 and the U.S. House of Representatives passed its version of the bill in February. According to Reuters, more than 100 U.S. House of Representatives and U.S. Senate lawmakers will meet for the first time to discuss the bill, but it could take several months before a final agreement is reached.

The CHIPS for America Act is a proposed bill that would provide incentives and funding of about $52 billion for semiconductor manufacturing to boost U.S. competitiveness in this market.

The move is seen as a needed measure to increase domestic U.S. semiconductor manufacturing that has fallen to 12% of the worldwide market share over the years. Many regions have opted to begin looking into regional semiconductor manufacturing due to the ongoing chip shortage caused by COVID-19. The pandemic revealed flaws in having the main concentration of semiconductors being manufactured in a handful of locations.

The hope is that if semiconductor manufacturing is expanded to more locations, the impacts to the supply chain when future issues emerge — such as geopolitical conflict or pandemics — will be lessened.

Recently, President Joe Biden accused China of meddling with the congressional negotiations regarding the bill to thwart its approval.

Leading semiconductor manufacturers Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics Co. have lobbied the U.S. government to allow foreign companies to participate in CHIPS for America Act funding. It is unclear if the discussion in Congress will include this topic.

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