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U.S. Senate Passes $76 Billion Chip Production Subsidies Bill

Semiconductor (Image credit: Shutterstock)

The U.S. Senate on Wednesday passed legislation to support the domestic semiconductor industry with over $75 billion. GlobalFoundries, Intel, Samsung Foundry, Texas Instruments, TSMC, and other companies that build semiconductor manufacturing facilities in the USA will welcome the move.

The U.S. Senate approved the 'Chips and Science' legislation on a 64 to 33 bipartisan vote. The bill authorizes the U.S. government to award U.S. chipmakers with about $52 billion in grants and other incentives and provide a 25% investment tax credit for new fabs worth up to $24 billion. In addition, the legislation provides over $170 billion over the next five years to various scientific research works in the USA, reports Reuters (opens in new tab).

Now that the Senate has passed the bill, the House of Representatives will review it, which are expected to pass it later this week. After that, they will send it to the President of the U.S., who will sign it and make it a law.

The proposed bill aims to boost the U.S. semiconductor industry, which starts its renaissance with multiple new fabs being built or optioned. It will help alleviate chip supply shortages and help the American economy. Also, it ensures consistent chip supply to companies in the U.S. In addition, the bill will strengthen U.S. scientific research prowess and ensure the country's long-term success in competition with China.

While companies based in the U.S. develop the vast majority of logic chips used today in the world (by revenue), U.S.-based chipmakers only produce 12% of chips in the world. Companies like TSMC, GlobalFoundries, Samsung Foundry, and UMC make the vast majority of their chips outside of the U.S. Keeping in mind that TSMC makes the world's most complex chips (developed by American companies) in Taiwan, there is a risk to their supply from China that is amid a trade war with the U.S.

While the Chips act was proposed in 2021, the Senate tied it to other spending projects and refused to consider it for a while. However, in recent weeks executives from GlobalFoundries and Intel warned the U.S. government and legislators that without subsidies authorized by the 'Chips and Science' act, they would not be able to build their new fabs in New York and Ohio quickly enough.

Now that the U.S. Senate approved the 'Chips and Science' bill, the House of Representatives and the President are expected to act quickly and make it law as soon as possible.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • Wonder where the money is coming from?
  • rluker5
    Still not as much as Taiwan or Korea, but at least it is improving the relative subsidy imbalance.
    It is good to support local real GDP. Without that the support services part of GDP isn't funded. Also a better use than roundabouts or "green energy initiatives"
  • spongiemaster
    Captain Discombobulate said:
    Wonder where the money is coming from?
    The benefit to the US economy should prove net positive over the long run. If China goes after Taiwan, the impact will be far far greater.
  • mwestall
    Captain Discombobulate said:
    Wonder where the money is coming from?
    The US has a fiat currency, the money comes from thin air, like all money. Sovereign debt is all notional and is purely based on faith. It is effectively infinite, hence more debt in the world than assets.