House Passes Bill to Increase Domestic Production of Semiconductor Chips, Check China’s Tech Rise

The House on Thursday passed the bipartisan Chips and Science Act, which aims to increase domestic production of computer chips to allow the U.S. to become more competitive against China in the global technology market.

The bill passed the House in a 243-187 vote one day after passing the Senate in a 64-33 vote. The legislation now heads to the desk of President Joe Biden.

Biden called the passage of the bill on Thursday “exactly what we need to be doing to grow our economy right now.”

“Today, the House passed a bill that will make cars cheaper, appliances cheaper, and computers cheaper,” Biden said. “It will lower the costs of every day goods. And, it will create high-paying manufacturing jobs across the country and strengthen U.S. leadership in the industries of the future at the same time.”

Twenty-four Republicans voted to pass the measure, despite Republican leadership making a last minute push to discourage GOP lawmakers from supporting the bill. GOP leaders sought to keep the bill from passing after news broke on Wednesday that Senator Joe Manchin (D., W. Va.) had reached a deal with Democratic leaders on a nearly half-a-trillion dollar spending package targeting energy and climate, health care, and increased taxes on the wealthy.

House GOP leader Kevin McCarthy criticized the Chips and Science Act on the House floor on Thursday as a “$280 billion blank check” to the semiconductor industry.

The Congressional Budget Office has estimated the package, which includes more than $52 billion for the domestic production of semiconductors and other technologies, will cost the U.S. $79 billion by 2031.

The U.S. currently produces just 12 percent of its chips domestically, according to the bill. That’s compared to 37 percent in the 1990s.

While the bill aims to make the U.S. more competitive against its foreign rivals, including China, it does not include funding for government agencies that will directly impact America’s competitiveness, such as the Defense Advanced Research Projects Agency, the Commerce Department’s export-control cell, the Justice Department’s foreign-agent enforcement unit, and the Treasury Department’s sanctions office.

The measure includes $39 billion to “build, expand, or modernize domestic facilities and equipment” for semiconductors, $2 billion to specifically manufacture semiconductors and  $11 billion for Department of Commerce research and development.