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The CHIPS Act up for Unexpected Vote to Approve $62 Billion Semiconductor Industry Subsidy

e U.S. Senate has fast-tracked a vote to bring to the Senate floor deliberation and final approval of the $62B in subsidies for the already Senate-approved bill known as the CHIPS Act.   The separate vote today on the CHIPS act appropriations will also include a vote on the Fabs Act:

“A draft [of the CHIPS Act] being circulated in Congress on Monday also included elements of a separate bill, known as the Fabs Act, which offers tax credits to build chipmaking plants, and $1.5bn for funding 5G networks,” (1) including “a 25% tax credit for the construction of fabs and the manufacturing equipment necessary to operate the facilities.” (2)

The CHIPS Act and FABS ACT legislation has now been fast-tracked and taken out of the United States Innovation and Competition Act of 2021, which is now stalled in the Senate.  This omnibus bill “addresses U.S. technology and communications, foreign relations and national security, domestic manufacturing, education, trade, and other matters.” (3) The CHIPS Act provision in the bill would have provided “funding for FY2022-FY2026 to support U.S. semiconductor manufacturing, research and development, and supply chain security” and was part of these broader provisions of the United States Innovation and Competition Act of 2021:

  • provides funding for wireless supply chain innovation;
  • establishes a Directorate for Technology and Innovation in the National Science Foundation;
  • extends through 2025 the authority of the National Aeronautics and Space Administration (NASA) to lease its non-excess real property and related personal property;
  • authorizes various programs and policies related to space exploration;
  • authorizes various international affairs programs and activities, including foreign assistance for the Indo-Pacific region;
  • requires federal infrastructure programs to provide for the use of materials produced in the United States;
  • imposes sanctions on China for cybersecurity and human rights abuses;
  • requires the Department of Health and Human Services to consider national security risks associated with sensitive genetic information;
  • includes initiatives related to elementary and secondary education, including those to increase computer science education;
  • contains provisions related to higher education, including those reauthorizing through FY2027 international education programs and addressing China’s influence on institutions of higher education;
  • modifies and expands the schedule for graduated merger filing fees;
  • prohibits federal funding for the Wuhan Institute of Virology;
  • requires the U.S. Trade Representative to take certain actions related to digital trade and censorship practices; and
  • extends through 2027 the Generalized System of Preferences. (3)

The vote today takes place with the backdrop of Taiwan’s GlobalWafers’ recently announced plan to build $5 Billion Plant in Sherman, Texas and our ongoing OODA Loop research and analysis based on the insights garnered from our November 2021 Stratigame on the Global Computer Chip Supply Chain Disruption.

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Daniel Pereira

Daniel Pereira

Daniel Pereira is research director at OODA. He is a foresight strategist, creative technologist, and an information communication technology (ICT) and digital media researcher with 20+ years of experience directing public/private partnerships and strategic innovation initiatives.