House sends Biden bill to spend $52 billion on computer chip production, compete with China

The U.S. is poised to pour more than $50 billion into domestic semiconductor production to increase its competitive edge with China.

The House gave final approval Thursday to long-stalled legislation titled the CHIPS and Science Act which would spend a total of $280 billion on science and technology, including $52 billion to boost U.S. production of microprocessing chips vital to everything from smartphones to automobiles.

“This bold, bipartisan legislation contains key House proposals to lower costs, create good-paying jobs, reduce our dependence on foreign manufacturers and turbocharge American innovation,” said House Speaker Nancy Pelosi, California Democrat.

The bill passed the House in a 243-187 vote with 24 Republicans joining all but one of the chambers’ Democrats in supporting the bill. A single Democrat, Rep. Sara Jacobs of California, voted present. 

The bill passed the Senate on Wednesday with bipartisan support.

The bill will now head to President Biden’s desk for his signature. He said it will boost competition and manufacturing jobs across the country.

“For decades, some ‘experts’ said we needed to give up on manufacturing in America. I never believed that. Manufacturing jobs are back,” Mr. Biden said in a statement. “Thanks to this bill, we are going to have even more of them.”

The CHIPS bill aims to address the semiconductor chip shortage and decrease U.S. reliance on foreign countries such as China for manufacturing microchips. It also would support regional technology hubs and include a tax credit covering 25% of investments in chip manufacturing through 2026.

Democrats said the bill was vital for national security, while most Republicans argued that the legislation was parading as an anti-China bill when it did little to confront the threat of Beijing.

Rep. Mike McCaul of Texas, the ranking Republican on the Foreign Affairs Committee, and New York Rep. John Katko, who is the top Republican on the Homeland Security Committee, were two of the prominent Republicans who voted for the bill.

“If Taiwan gets taken over by China, they will own the global market and 90% of the advanced semiconductor chip manufacturing, which are in your phones, your automobiles, to our most advanced weapons systems, which is what I’m most concerned about,” Mr. McCaul said. 

The congressman added that his committee position gives him a unique insight into the China problem. “This is vitally important to our national security,” he said.

Rep. Chip Roy, a Texas Republican who opposed the bill, said the payout to microchip manufacturers was corporate welfare that threatens to make high inflation worse.

“There is zero reason for [House Republicans] to support the CHIPS Act — either on the merits or after this ridiculous reconciliation package spending billions. This is all more woke nonsense and corporate cronyism running smoke,” Mr. Roy said.