Politics

Senate Passes $280 Billion Semiconductor, R&D Package After Two Years Of Negotiation

(MICHAEL REYNOLDS/POOL/AFP via Getty Images)

Michael Ginsberg Congressional Reporter
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The Senate passed the multi-billion dollar CHIPS Plus Act on Wednesday, more than two years after members of Congress began negotiating a package to overhaul the federal government’s research and development initiatives.

The bill, negotiated by Senate Majority Leader Chuck Schumer and Republican Indiana Sen. Todd Young, was introduced as an amendment replacing a Supreme Court security funding package. It passed the Senate 64-33, with 17 Republicans joining 47 Democrats voting in favor. A Monday thunderstorm delayed CHIPS Plus’ passage by one day, with several senators unable to travel back to Washington, D.C., to vote.

The CHIPS Plus Act includes $52 billion for semiconductor manufacturing through 2025, tax credits for semiconductor manufacturing in the U.S., and $200 billion for federal science, technology, engineering, and mathematics (STEM) research. The $200 billion includes funding for the National Science Foundation, as well as cash for schools to increase STEM education offerings.

Right now, we’re in the middle of a great power competition with an authoritarian regime in Beijing that seeks global primacy and rejects democracy. The Chinese Communist Party is currently investing $1.4 trillion in frontier technologies that will dominate the 21st century,” Young said while urging colleagues to vote “yes” on the legislation.

“China’s government is planning on winning the A.I. race, winning future wars, and winning the future. And the truth is, if we’re being honest with ourselves, Beijing is well on its way to accomplishing these goals.”

Elected officials have been negotiating a research and development package since 2020, when Schumer, Young, Democratic California Rep. Ro Khanna, and Republican Wisconsin Rep. Mike Gallagher introduced the Endless Frontiers Act. Neither chamber was able to pass Endless Frontiers, and Schumer and Young reintroduced the package as the U.S. Innovation and Competition Act (USICA).

The Senate and House of Representatives passed two different version of USICA, and the bills are currently being negotiated in a conference committee. The House version of USICA includes billions of dollars in green energy funds, making the lower chamber’s bill unacceptable to Republicans. (RELATED: Over 100 CEOs Sign Letter Pushing Congress To Reach Agreement On Computer Chip Competitiveness)

Semiconductors, also known chips, are necessary for the manufacturing of most everyday devices, including phones, computers, and cars. More than 90% of the most advanced semiconductors are fabricated in Taiwan.

A Chinese invasion of Taiwan would therefore prove extremely disruptive to almost all forms of technology worldwide, leading some members of Congress to urge a supply chain review and reshoring of the semiconductor industry. President Joe Biden invoked the Defense Production Act to promote semiconductor reshoring in March.