On Wednesday, the US Senate has passed sweeping legislation in order to subsidise the domestic semiconductor industry, it has a hope to boost companies as they compete with China and alleviate a persistent shortage that has completely affected everything from cars, weapons, washing machines and video games.

HIGHLIGHTS
A vote was planned by the House of Representatives on the long-awaited bill
$170 billion was authorised for five years to boost US scientific research
The Chinese Embassy in Washington has asked China to 'firmly opposed' the bill

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Well, on Thursday the House of Representatives had planned to vote on the long-awaited bill once the Senate passed it on a 64 to 33 bipartisan vote. If it gets approved as expected, President Joe Biden would plan to sign it into law early next week.

The 'Chips and Science' act provides around $52 billion (roughly Rs. 15,949 crore) in government subsidies for US semiconductor production along with an investment tax credit for chip plants which was estimated to be worth $24 billion (roughly Rs. 1,913,93 crore).

The legislation would be authorising over $170 billion (roughly Rs. 13,558,09 crore) for five years in order to boost US scientific research so that it could better compete with China. Congress would still have pass separate appropriations legislation in order to fund those investments.

Senator Mark Warner had mentioned that the bill would help them to fund 10 to 15 new semiconductor factories. He cleared that 'if we haven’t done this, there would not be another US semiconductor manufacturing plant which would be get built this country ever.'

The Chinese Embassy in Washington has mentioned China to 'firmly opposed' the bill that it said was 'entrenched in the Cold-War and zero-sum game mentality and runs counter to the common aspiration of individuals from all sectors in China and the US to strengthen exchanges and cooperation.'

Most of the funding was slated for brand new factories which would eventually take 2 or 3 years to build. Some authorities have mentioned that it still faces supply chain problems from chips shortages.

According to Senator Mark Kelly, if the US would lose the access to chips which were made in Taiwan then it would shrink US Gross Domestic Product by 10 percent and would cripple auto production.

Joe Biden had urged the House to quickly pass on the bill.

After the Senate vote, he has mentioned that 'as Americans are worried regarding the state of the economy and the value of living, the CHIPS bill would be considered as one answer: it would accelerate the production of semiconductors in America, lowering costs on everything from cars to dishwashers.'

Critic like Senator Bernie Sanders who was the only member of the Senate Democratic caucus to vote against the bill, has called the measure as the “blank check” to highly profitable chip manufacturers.

Lawmakers have been engaged in working on alternative provisions that would address other supply chain vulnerabilities.

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