The Senate passed a bipartisan bill Wednesday aimed at increasing domestic production of computer chips in order for the U.S. to compete more effectively against China in the global technology market.
The CHIPS-plus or Chips and Science Act, passed in a 64-33 vote, and now heads to the House, where it is expected to get enough votes to go to the president’s desk. The measure includes over $52 billion for the domestic production of semiconductors and other technologies, and the Congressional Budget Office has estimated the package will cost the U.S. $79 billion by 2031.
The bill is specifically intended to counter the dominance of foreign rivals like China, who has spent years stealing America’s intellectual property. The U.S. produces 12 percent of its chips domestically, compared to 37 percent in the 1990s, according to the bill.
“We knew that if we didn’t get there first, our rivals—chief among them the Chinese Communist Party—would likely beat us to the punch and reshape the world in their authoritarian image,” Majority Leader Chuck Schumer said in support of the bill, calling it a “turning point for American leadership in the 21st Century.”
The bill, however, does not include measures funding government agencies that will directly impact America’s competitiveness, like 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.
Instead, it includes $39 billion to “build, expand, or modernize domestic facilities and equipment” for semiconductors, and $2 billion to specifically manufacture semiconductors. Further, $11 billion is provided for Department of Commerce research and development.
President Joe Biden praised the passage of the bill, saying it will lower costs and bring manufacturing jobs back to the U.S.
“As Americans are worried about the state of the economy and the cost of living, the CHIPS bill is one answer: it will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers. It also will create jobs – good-paying jobs right here in the United States,” Biden said in a statement.