US President Joe Biden will sign a bill to subsidize the US semiconductor industry and boost efforts to make the US more competitive with China, the White House said on Wednesday. The act is intended to alleviate persistent shortages that have affected everything from cars, weapons, washing machines and video games. Thousands of cars and trucks remain parked in southeast Michigan waiting for chips as shortages continue to affect automakers.
A rare major breakthrough in US industrial policy, the bill provides approximately $52 billion (approximately Rs 4.11,400) in government grants for US semiconductor research and manufacturing. . It also includes an investment tax credit for chip factories estimated at $24 billion (approximately Rs 1,89,800).
“The bill will accelerate our efforts to make semiconductors in the US here” Biden said on Tuesday.
The law allows $200 billion (approximately Rs 15,82,000) over 10 years to promote US scientific research to better compete with China. Congress will still need to pass separate appropriations legislation to fund those investments.
China has been lobbying against the semiconductor bill. The Chinese embassy in Washington said China was “resolutely opposed”, calling it a “Cold War mentality”.
Many US lawmakers have said they generally wouldn’t support huge subsidies for private businesses but noted that China and the European Union have given billions of incentives to their chip companies. surname. They also cited national security risks and major global supply chain problems that have hampered global manufacturing.
Some progressive lawmakers have raised concerns about the size of government funding for profitable chip companies.
The Commerce Department said on Friday that it would limit the size of government subsidies for semiconductor manufacturing and would not let companies use the funding to “exploit profits.”
Congressional Radical Party Chairman Pramila Jayapal said the group supported the legislation after lengthy negotiations with Commerce Secretary Gina Raimondo after the group expressed concern chip companies would use the funding to buy stock or pay dividends.
© Thomson Reuters 2022
