Congress passes legislation to restart semiconductor production in the United States

Congress on Thursday passed legislation that would authorize $52 billion in subsidies to revive U.S. semiconductor production and another $10 billion for research and development.

The text, which was voted on in the Senate the previous day, won the votes of 243 elected members of the House of Representatives, including 24 Republicans. 187 were against.

The law now has to be ratified by President Joe Biden, marking victory after a long struggle and (rare) good news ahead of the midterm elections.

It “will lower the cost of daily living, create high-paying industrial jobs in the country, and strengthen America’s leadership in the industry of the future,” he commented in a press release issued shortly after its passage.

The Democrat had previously spoken to his Chinese counterpart Xi Jinping, whose administration has strongly condemned a law that “under the guise of boosting American competitiveness” reduces scientific and technological cooperation between the two countries.

Demand for semiconductors, the heart of all modern electronics, has exploded during the pandemic, causing global shortages that have been exacerbated by the closure of Chinese factories amid the COVID resurgence.

The United States suffered from this, as its share of world production has fallen sharply in favor of Asia in recent years. This significantly slowed the production of new cars last year and drove up prices in the automotive industry.

“The pandemic has exposed serious vulnerabilities in our supply chains, particularly our dependence on certain regions for certain critical materials,” US Secretary of Commerce Gina Raimondo said in a statement.

“This law puts our country in a stronger position to withstand future economic shocks and avoid major disruptions to the daily lives of the American people,” she said.

The government also warned of the risk to national security, since many military equipment requires these components.

Despite an observation shared by Democrats and Republicans on the need to revive national manufacturing, congressional elects were unable to agree on a final text for months.

They eventually agreed to release $39 billion in aid to semiconductor manufacturers and $13 billion to research labs.

Several large corporations have already indicated that they want to open new factories in Ohio or Indiana.

The law, estimated at $280 billion in total, also earmarks $100 billion over five years for research and development in other sectors and to strengthen the security of the US Supreme Court.

Ahead of the vote, Senator Bernie Sanders, a figure on the left, was moved by the amounts allocated to “profitable” companies that he says have “closed 780 factories in 20 years” in the United States.

The text “contains important safeguards to ensure that companies receiving taxpayers’ money invest in America,” assured Joe Biden.

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