US Senate passes bill that gives billions in subsidy to chip production

The US Senate has passed a bill to subsidize the chip sector. The law must release tens of billions in subsidies and tax breaks for the construction of new chip factories in the United States.

The Senate passed the Chips and Science bill this week by a vote of 64 to 33, writes news agency Reuters. Under the bill, $ 52.7 billion in subsidies will be released for the chip sector, which amounts to 51.7 billion euros. The bill also releases up to 23.5 billion euros in tax benefits for the construction of new chip factories. Companies that produce chips in the United States, such as GlobalFoundries, Intel, Micron, Samsung and TSMC, can claim the financing. As part of the law, the US will also allocate more than $170 billion over the next five years to fund scientific research.

The bill is intended to strengthen the American chip sector. The US is doing this partly because of global geopolitical tensions and to alleviate future chip shortages. The country has several major chip designers, such as AMD, Apple and Nvidia, but in terms of chip manufacturing, the US currently has a relatively low market share. Several companies have already started building new chip factories in the United States, including Intel, Samsung and TSMC.

This chip law has been in the works for more than a year. Another version passed the Senate in June last year, but failed in the House of Representatives. The lower house will vote on this amended version next Thursday. The proposal is expected to be adopted this time. If that indeed happens, US President Joe Biden wants to sign the proposal early next week, after which it will take effect.