US lawmakers unveil bid to boost domestic chipmaking industry

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A bipartisan group of lawmakers introduced a measure aimed at strengthening chip manufacturing in the US, adding to efforts to champion the sector and lure high tech supply chains back into the United States.

KEY POINTS:

  • Bipartisan group of lawmakers introduce a measure aimed at strengthening chip manufacturing in the US
  • The move adds to efforts to lure high tech supply chains back into the United States
  • Under the move, $5 billion would be allocated as grants to federal agencies to increase R&D

The measure, backed by top Senate Democrat Chuck Schumer and key Republican Tom Cotton, would offer $15 billion in federal grants to states to build, expand or modernise domestic semiconductor manufacturing and R&D facilities.

It would also authorise $5 billion in federal dollars towards public-private projects to build or modernise fabs that produce “measurably secure and specialised microelectronics” for use by the federal government as well as for critical infrastructure.

An additional $5 billion would be allocated as grants to federal agencies to foment research and development in the sector.

The measure was offered as an amendment to the National Defence Authorisation Act, which authorises US military spending but is used as a vehicle for a broad range of policy matters as it has passed annually for more than 50 years.

However, the bill will be introduced as a standalone on Monday as well to bolster its chances, a Senate aide said.

While approval is far from guaranteed in politically gridlocked Washington, the amendment is part of a growing bipartisan campaign to fuel growth of US chip foundries, as the industry’s centre of gravity has shifted towards Asia.

While some US businesses such as Intel Corp and Micron Technology Inc still make chips in the United States, Taiwan Semiconductor Manufacturing Co has more than half of the overall market for contract manufacturing chips and an even stronger hold on the most advanced chips.

Republican Senator John Cornyn and Democratic Senator Mark Warner introduced a bill this month to provide more than $22.8 billion in aid for semiconductor manufacturers to spur the construction of chip factories in America amid a strategic technology rivalry with China.

The Semiconductor Industry Association welcomed the move as overseas governments have offered “aggressive incentives for advanced chip manufacturing to relocate.”

Via our content partners at Reuters. Reporting by Alexandra Alper. Editing by Daniel Wallis.

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