Lawmakers Introduce Bill to Support Semiconductor Industry Amid US-China Tech Competition

Lawmakers introduced legislation this week to incentivize U.S. semiconductor manufacturing and provide more federal support for research and development. The bill includes refundable investment tax credits, a $10 billion federal match system to match state and local incentives, and the establishment of a new semiconductor program within the Commerce Department.

Sens. John Cornyn, R-Texas, and Mark Warner, D-Va., introduced the bill June 10, saying it will “restore semiconductor manufacturing” to the U.S. “This legislation would help stimulate advanced semiconductor manufacturing capabilities domestically, secure the supply chain, and ensure U.S. maintains our lead in design,” Cornyn said in a statement. Warner said U.S. “complacency” has allowed foreign competitors to “catch up” with U.S. semiconductor technology. “This bill reinvests in this national priority” and emphasizes “the need for multilateral engagement with our allies” to address “threats to the global supply chain,” Warner said. Reps. Michael McCaul, R-Texas, and Doris Matsui, D-Calif., plan to introduce the House version of the bill.

The bill comes amid reports that the semiconductor industry is preparing to lobby for billions of dollars in federal funding amid growing technology competition with China (see 2006010011). Semiconductors have been a key issue in U.S.-China technology competition, with the Trump administration recently increasing restrictions on telecommunications equipment maker Huawei (see 2005150058) and agreeing to a deal with the Taiwan Semiconductor Manufacturing Company to build a factory in Arizona (see 2005150033). Lawmakers have expressed concerns the deal would unfairly benefit TSMC while disadvantaging U.S. semiconductor companies (see 2005200030).

The bill, the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, could go a long way toward supporting U.S. semiconductor manufacturing and keeping U.S. companies ahead of competitors in foreign markets, the Semiconductor Industry Association said June 10. The bill “would help our country rise to this challenge, invest in semiconductor manufacturing and research, and remain the world leader in chip technology,” SIA Board Chair Keith Jackson said. SIA said the bill will help level the playing field with foreign companies, which benefit from “significant semiconductor manufacturing incentives.” The bill will help invest “tens of billions of dollars” in semiconductor manufacturing incentives over the next five to 10 years, the group said.

The bill would also establish a semiconductor program within Commerce’s National Institute of Standards and Technology, which would help fund and support U.S. 5G leadership. A separate provision would direct the administration to create a subcommittee on semiconductor leadership at the National Science and Technology Council, which would develop a national strategy for semiconductor development to counter Chinese initiatives.

“As global competitors invest big to attract advanced semiconductor manufacturing to their shores, the U.S. must get in the game and make our country a more competitive place to produce this strategically important technology,” SIA President John Neuffer said in a statement, calling the bill “bold” and “timely.”