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Chips funding bill faces a final vote in Senate this week

Legislation includes $52 billion to subsidize chip manufacturing and research, and tens of billions more for science and tech spending

Semiconductor chips are printed onto silicon wafers and loaded into containers in the clean room at GlobalFoundries Fab 8 in Malta, N.Y. The Senate is expected to vote on a bill this week that would provide subsidies for more such factories in the United States. (Cindy Schultz/For The Washington Post)
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A long-running push to provide $52 billion in subsidies to domestic semiconductor manufacturers faces a final vote in the Senate this week via a bill that also includes tens of billions of dollars for the National Science Foundation and regional tech start-ups.

Semiconductor companies and universities are already jockeying for slices of the funding, in an early sign of what’s likely to be a heated competition, should the bill become law.

After months of debate and setbacks, the legislation resembles the United States Innovation and Competition Act, the original form of the bill intended to boost U.S. competitiveness against China, which cleared the Senate last year but ran aground in the House.

Buying a car these days is a challenge, given an array of difficulties facing the auto business. The problems stem from a global semiconductor chip shortage. (Video: Lee Powell/The Washington Post)

The Senate is scheduled to hold a cloture vote Monday on the new legislation. If it wins the 60 votes needed to clear that bar, it would move on to a final vote by Tuesday or Wednesday. Debate would then move to the House.

Much of the $52 billion would go to chip manufacturers to incentivize construction of domestic factories to produce the components, which are the brains that power all modern electronics.

Global shortages of the tiny components have hobbled all types of manufacturing, forcing automakers to cut production and driving up prices for cars and other goods.

Countries around the world have been scrambling to increase production of the components by offering manufacturers subsidies to build factories, which cost billions of dollars to construct.

The bill also includes about $100 billion in authorizations over five years for programs including expanding the National Science Foundation’s work and establishing regional technology hubs to support start-ups in areas of the country that haven’t traditionally drawn big funding for tech.

The NSF would receive funds for a new technology directorate that would help turn basic research breakthroughs into real-world applications in fields such as artificial intelligence and quantum computing.

“Our universities are very structured around winning NSF grants and publishing. They’ve been less focused on actually patenting,” Sen. Maria Cantwell (D-Wash.), chair of the Senate Committee on Commerce, Science and Transportation, told The Washington Post. The new funding would aim to help the United States translate its science into applications and domestic manufacturing faster, she said.

Chip manufacturing giants including Intel and TSMC have already said they are counting on receiving some of the U.S. semiconductor subsidies to help finance factory construction projects in Ohio and Arizona. GlobalFoundries, another big chip producer, also hopes for some of the funding to support a factory expansion in Upstate New York.

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Last week, Minnesota-based chipmaker SkyWater Technology and Purdue University said they intend to win part of the funding to help finance a new $1.8 billion factory and research facility next to the university in West Lafayette, Ind.

In an interview, SkyWater chief executive Thomas Sonderman said the rough plan is for federal and Indiana state funding to pay for two-thirds of the factory, with the rest coming from SkyWater and its chip customers.

The facility would most likely make chips for the auto industry, medical device manufacturers, aerospace customers and the Department of Defense, he said.

Announcing the plan at an event last week, Purdue President Mitch Daniel said the project would make the university “a more vibrant and attractive environment so that the brightest minds in the world will want to come and study and teach and research and live here.”

IBM, the State University of New York at Albany and other partners are also lobbying for funding to establish a semiconductor research center in Albany. Senate Majority Leader Charles E. Schumer (D-N.Y.) is backing that effort.

This week, IBM is planning to fly nearly 60 senior executives to Washington, D.C., to push members of Congress to pass the legislation, spokesman Sean Higgins said Friday.

“Congress has a once in a generation opportunity to reinvigorate U.S. leadership and innovation in a critical field of technology while creating good paying tech jobs nationwide,” Mukesh Khare, vice president of hybrid cloud at IBM Research, said in a statement.