Democrats in the House have released the text of a wide-ranging bill that seeks to boost U.S. production of semiconductors through a new federal assistance fund totaling $52 billion over five years.
The proposed America Creating Opportunities for Manufacturing, Pre-Eminence in Technology and Economic Strength (COMPETES) bill, which leading House Democrats made public on Jan. 25, also includes additional spending to bolster U.S. producers of solar energy components.
The semiconductor fund is a key element of a wide-ranging, 2,912-page bill. It also includes provisions aimed at aiding the supply chain, giving a push to U.S. science research and technology, and strengthening economic development, diplomacy and alliances around the world. [View section-by-section breakdown of the bill here.]
If the House approves the legislation, the next step would be a conference committee with the Senate, where negotiators would try to work out differences between the America COMPETES bill and a similar measure that the Senate approved last June.
According to summary of the House bill, its envisioned Creating Helpful Incentives to Produce Semiconductors (CHIPS) fund would “incentivize private-sector investments” in semiconductors. It would implement provisions of the 2021 defense authorization act, which includes assistance for the U.S. semiconductor industry.
The defense measure states that the fund's uses would include “construction, expansion or modernization” of facilities or equipment to make semiconductors. Other uses would include research and development.
The America COMPETES bill also would provide $3 billion over five years in grants or loans to build, expand or retrofit facilities that produce solar energy components
Gregory Wetstone, the American Council on Renewable Energy’s president and chief executive officer, praised the America COMPETES bill. Wetstone said in a statement, “The United States must prioritize the development of a 21st-century domestic supply chain for solar technology and this legislation is a fundamental step.”
John Neuffer, the Semiconductor Industry Association’s president and CEO, said in a statement, “This critical funding will help ensure more of the chips Americans need are researched, designed and manufactured on U.S. soil, strengthening our supply chains and creating new, high-paying American jobs across the country.”
The association said that the U.S. share of world semiconductor manufacturing capacity has fallen to 12% now, from 37% in 1990.
President Joe Biden hailed the House Democrats' proposal. He said in a statement that the America COMPETES bill provisions are "squarely focused on easing the sort of supply chain bottlenecks like semiconductors that have led to higher prices for the middle class."
The release of the House bill comes on the heels of Intel Corp.'s Jan. 21 announcement that it plans to spend $20 billion to build two chipmaking facilities in the Columbus, Ohio, area.
But House Republicans objected to the House Democrats' bill. Rep. Michael McCaul (Texas) the top Republican on the Foreign Affairs Committee, said in a statement that GOP lawmakers "have been in talks with House and Senate committees of jurisdiction for weeks, trying to put together a bipartisan bill that could pass Congress."
McCaul added, "Rather than allowing those talks to play out, Speaker Pelosi and House Democrats have decided to torpedo the chance of a bipartisan, bicameral bill to confront the generational threat posed by the Chinese Communist Party."
He also objected to the inclusion of a provision authorizing funds for the United Nations Green Climate Fund, which he blasted as a "slush fund."
Brian Turmail, an Associated General Contractors of America vice president, said via email that AGC would have preferred to see a "similar, but bipartisan, version of this bill proceed."
Turmail added, "While we welcome the investments outlined in this measure, we do have some concerns with a number of the regulatory, labor and environmental provisions in this more partisan legislation."