Power Semiconductors

Lawmakers may move CHIPS for America Act to smaller bill

15 July 2022

Lawmakers may be seeking to move the CHIPS for America Act — funding that would inject the U.S. with billions of dollars to advance domestic semiconductor manufacturing — into a smaller bill for easier passage.

Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act is part of a larger bill called the U.S. Innovation and Competition Act (USICA). The act was originally designed to support technological innovations to compete with China. The CHIPS for America Act portion of the USICA specifically would seek to boost domestic semiconductor manufacturing to support the supply chain.

The idea to expand domestic semiconductor making emerged with the outbreak of COVID-19, which caused a global supply chain semiconductor shortage that is still affecting the market today. The outbreak exposed flaws in the aggregation of the chip supply chain and the hope is that if the supply chain was spread more globally beyond just Taiwan and Korea, it would lessen the blow if a future pandemic or geopolitical issues emerge.

CHIPS for America Act would provide $52 billion in funding for the expansion of semiconductor manufacturing as well as R&D. The U.S. Senate passed the bill in June of last year and the U.S. House of Representatives passed its version of the bill in February. Both groups were meeting to come up with a compromise bill for passage, but political issues have emerged that may delay the USICA.

In response and to get the semiconductor manufacturing portion of the bill approved, U.S. Secretary of Commerce Gina Rainmondo told Reuters that lawmakers would move the CHIPS for America Act to a smaller bill that would include investment tax credits for chip manufacturing.

“Things seem to be coalescing around the path of chips, or maybe chips plus a thing or two, and getting it done this month,” Raimondo said. “That is a good outcome because the worst outcome is getting nothing done by Aug. 4.” That is when Congress leaves for the summer.

To contact the author of this article, email PBrown@globalspec.com

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