US Legislation To Boost Chip Funding Set For House

The US Congress is planning to renew efforts to boost federal spending on domestically produced semiconductors, with the House of Representatives to introduce a bill on the matter “soon”, according to Speaker Nancy Pelosi.

“The House will soon introduce its competitiveness bill,” Pelosi said in a letter to Democratic colleagues.

“The House legislation will supercharge our investment in chips, strengthen our supply chain and transform our research capacity, plus many other key provisions,” she wrote.

The worldwide chip shortage has led to production issues with everything from domestic appliances to automobiles.

Funding

Pelosi’s announcement came shortly after Intel announced it would invest at least $20 billion (£15bn) into a new chip-making complex in Ohio.

That figure could rise to $100bn over ten years if Intel benefits from the $52bn in funding included in the proposed US Innovation and Competition Act.

A version of the act passed the Senate last year, but it faces challenges in the House, where some influential Democrats have said they want it to include funding for broader societal goals, an idea criticised by Republicans.

At a White House event held with Intel chief executive Pat Gelsinger to announce the Ohio investment, US President Joe Biden promoted the “historic” proposed legislation.

“Let’s get another historic piece of bipartisan legislation done,” he said. “Let’s do it for the sake of our economic competitiveness and our national security.”

Domestic chip plants

In addition to the $52bn in funding to expand domestic chip manufacturing, the Senate version of the package would authorise about $190bn in spending to strengthen US advanced technologies to better compete globally against countries such as China.

Biden has said surging inflation has “everything to do with the supply chain” and that the US can become self-reliant for automotive computer chips.

Intel has said it will proceed with the Ohio investment regardless of the House bill, but that expansion will be faster and on a larger scale with the subsidies.

The European Commission is also looking to expand domestic chip production and president Ursula von der Leyen said last week draft legislation on the issue would be introduced in early February.

EU legislation

The European Chips Act aims to adapt state aid rules, improve means to anticipate shortages and crises and strengthen the EU’s research capacity.

“Most of supplies come from a handful of producers outside Europe,” von der Leyen said at the opening of the World Economic Forum.

“This is a dependency and uncertainty we simply cannot afford. By 2030, 20 percent of the world’s microchips production should be in Europe.”