U.S. House sends bill to aid computer chip industry to Biden

The House on Thursday passed a $280 billion package to boost the semiconductor industry and scientific research in a bid to create more high-tech jobs in the United States and help it better compete with international rivals, namely China.

The House approved the bill by a solid margin of 243-187, sending the measure to President Joe Biden to be signed into law. About two-dozen Republicans voted for the legislation.

“My plea is put politics aside. Get it done,” Biden said before the vote, adding it would give the U.S. “the ability not only to compete with China for the future, but to lead the world and win the economic competition of the 21st century.”

Some Republicans viewed passing the legislation as important for national security and economic development. Republican U.S. Sen. Todd Young of Indiana has been closely involved in the legislation.

Rep. Mike McCaul, the top Republican on the House Foreign Affairs Committee, said it was critical to protect semiconductor capacity in the U.S., which he said was too reliant on Taiwan for the most advanced chips. That could prove to be a major vulnerability should China try to take over the self-governing island that Beijing views as a breakaway province

“I’ve got a unique insight in this. I get the classified briefing. Not all these members do,” McCaul said. “This is vitally important for our national security.”

Other Republicans argued the government should not spend billions to subsidize the semiconductor industry and GOP leadership in the House recommended a vote against the bill, telling members the plan would provide enormous subsidies and tax credits “to a specific industry that does not need additional government handouts.”

Rep. Guy Reschenthaler, R-Pa., said the way to help the industry would be through tax cuts and easing federal regulations, “not by picking winners and losers” with subsidies—an approach that Rep. Joseph Morelle, D-N.Y., said was too narrow.

“This affects every industry in the United States,” Morelle said. “Take, for example, General Motors announcing they have 95,000 automobiles awaiting chips. So, you want to increase the supply of goods to people and help bring down inflation? This is about increasing the supply of goods all over the United States in every single industry.”

The bill provides more than $52 billion in grants and other incentives for the semiconductor industry as well as a 25% tax credit for those companies that invest in chip plants in the U.S. It calls for increased spending on various research programs that would total about $200 billion over 10 years, according to the Congressional Budget Office.

Indiana economic development leaders have been hoping for passage of the federal bill because the state would like to tap federal funding to land a $1.8 billion semiconductor plant at Purdue University.

Last week, Minnesota-based chipmaker SkyWater Technology and Purdue  said they intend to win part of the funding to help finance a proposed factory and research facility in West Lafayette.

In an interview, SkyWater chief executive Thomas Sonderman said the rough plan is for federal and Indiana state funding to pay for two-thirds of the factory, with the rest coming from SkyWater and its chip customers.

The facility would most likely make chips for the auto industry, medical device manufacturers, aerospace customers and the Department of Defense, he said.