U.S. senators voted on Tuesday to advance a bill to give $52 billion in subsidies and $24 billion in tax breaks to U.S. semiconductor makers to help them build manufacturing plants here in the United States.
President Biden, together with a number of semiconductor manufacturers, had lobbied strenuously in favor of the CHIPS Act, believing it to be a solution to supply chain disruptions that have held up the manufacturing of cars, appliances, and other consumer goods that require semiconductors, as well as creating risks for America's military.
With a government subsidy of $50 billion, America's chip makers will return to a 40 percent market share, building 19 new domestic manufacturing plants and investing $279 billion in capital.
China has plans to invest in chip manufacturing facilities.
Critics of the bill argue that it is an unnecessary and wasteful gift to a tech sector that is already highly profitable, and that protections to ensure that the funds would not be used to benefit Chinese manufacturing were not included in the version that Senators approved.
The American semiconductor industry has been split on its support for the manufacturing subsidies included in the Senate bill, with companies like Intel, which can afford massive investments in factories, gaining a windfall advantage over their competitors, like Nvidia, Advanced Micro Devices, and Qualcomm, that merely design chips and outsource the manufacturing to partner companies.
According to a report on the bill by the Heritage Foundation, "While the subsidies to semiconductor manufacturers are the worst portion of the bill, the rest of the package spreads nearly $200 billion in research funding across a variety of government agencies, with insufficient guardrails included to protect that research from Chinese espionage."
https://www.theamericanconservative.com/chips-act-moving-forward/
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