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

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

The Senate passed the Chips and Science bill this week by 64 votes to 33 against, writes Reuters news agency. Under the bill, 52.7 billion dollars in subsidy will be released for the chip sector, which translates 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 manufacture chips in the United States, such as GlobalFoundries, Intel, Micron, Samsung and TSMC, can apply for 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 US 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 modified version next Thursday. The proposal is expected to be adopted this time. If that does happen, US President Joe Biden wants to sign the bill early next week, after which it goes into effect.