US lawmakers propose US$22.8 billion in aid to semiconductor industry amid rivalry with China
- The proposal includes a refundable income tax credit for semiconductor equipment, funds to match state incentives to build factories, and R&D funding
- While some firms such as Intel and Micron Technology still make chips in the US, the industry’s centre of gravity has shifted to Asia
A bipartisan group of US lawmakers on Wednesday introduced a bill that would provide more than US$22.8 billion in aid for semiconductor manufacturers, aiming to spur the construction of chip factories in America amid a simmering strategic technology rivalry with China.
Chip factories can cost up to US$15 billion to build, with much of the expense in the form of pricey tools. The proposal would create a 40 per cent refundable income tax credit for semiconductor equipment, US$10 billion in federal funds to match state incentives to build factories, and US$12 billion in research and development funding.
Senators John Cornyn, a Texas Republican, and Mark Warner, a Virginia Democrat, introduced the bill in the Senate. Aides to Representatives Michael McCaul, a Texas Republican, and Doris Matsui, a California Democrat, said the two planned to introduce a version in the US House of Representatives on Thursday.
While a network of “trusted foundries” exists in the United States to help supply chips to the US government, many chips must still be sourced from Asia.
“As the Chinese Communist Party aims to dominate the entire semiconductor supply chain, it is critical that we supercharge our industry here at home,” McCaul said in a statement.