US President Joe Biden next Tuesday will sign a bill to subsidize the US semiconductor industry and boost efforts to make the United States more competitive with China, the White House said on Wednesday.
The legislation aims to alleviate a persistent shortage that
has affected everything from cars, weapons, washing machines and video games.
Thousands of cars and trucks remain parked in southeast Michigan awaiting chips
as the shortage continues to impact automakers.
A rare major foray into US industrial policy, the bill
provides about $52 billion in government subsidies for research and US
production of semiconductors. It also includes an investment tax credit for
chip plants estimated to be worth $24 billion.
"The bill will supercharge our efforts to make
semiconductors here in America," Biden said Tuesday.
The legislation authorizes $200 billion over 10 years to
boost US scientific research to better compete with China. Congress would still
need to pass separate appropriations legislation to fund those investments.
China had lobbied against the semiconductor bill. The
Chinese Embassy in Washington said China "firmly opposed" it, calling
it reminiscent of a "Cold War mentality."
Many US lawmakers had said they normally would not support
hefty subsidies for private businesses but noted that China and the European
Union have been awarding billions in incentives to their chip companies. They
also cited national security risks and huge global supply chain problems that
have hampered global manufacturing.
Some progressive lawmakers had raised concerns about the
size of government grants to profitable chip companies.
The Commerce Department said Friday it will limit the size
of government subsidizes for semiconductor manufacturing and will not let firms
use funding to "pad their bottom line."
Congressional Progressive Caucus chair Pramila Jayapal said
the group backed the legislation after lengthy negotiations with Commerce
Secretary Gina Raimondo after the group expressed concerns chips companies
would use funding for stock buybacks or pay dividends. © Reuters
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