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Senate Democrat proposes $52 billion for U.S. chips production, R&D

Stock MarketsMay 18, 2021 09:30PM ET
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© Reuters. U.S. Senate Majority Leader Chuck Schumer (D-NY), with Senator Gary Peters (D-MI) and Senator Bob Menendez (D-NJ), speaks to reporters during the weekly news conference following the Democratic caucus policy luncheon on Capitol Hill in Washington, U.S. Ma

By David Shepardson

WASHINGTON (Reuters) - U.S. Senate Democratic Leader Chuck Schumer unveiled revised bipartisan legislation late Tuesday to approve $52 billion to significantly boost U.S. semiconductor chip production and research over five years.

The emergency funding proposal will be included in a more than 1,400-page revised bill the Senate is taking up this week, as first reported by Reuters on Friday, to spend $120 billion on basic U.S. and advanced technology research to better compete with China.

"American manufacturing has suffered rather dramatically from a chip shortage," Schumer said. "We simply cannot rely on foreign processors for chips. This amendment will make sure that we don't have to."

The proposal includes $49.5 billion in emergency supplemental appropriations to fund the chip provisions that were included in this year's National Defense Authorization Act, but which require a separate process to garner funding.

President Joe Biden has also called for $50 billion to boost semiconductor production and research.

Supporters of funding note the U.S. had a 37% share of semiconductors and microelectronics production in 1990; today just 12% of semiconductors are manufactured in the United States.

"There is an urgent need for our economic and national security to provide funding to swiftly implement these critical programs. The Chinese Communist Party is aggressively investing over $150 billion in semiconductor manufacturing so they can control this key technology," a bill summary released Tuesday said.

The measure would "support the rapid implementation of the semiconductor provisions" in the defense bill.

As reported by Reuters, the bill includes $39 billion in production and R&D incentives and $10.5 billion to implement programs including the National Semiconductor Technology Center, National Advanced Packaging (NYSE:PKG) Manufacturing Program and other R&D programs.

Last month, Ford Motor (NYSE:F) warned the chip shortage might slash its second-quarter production by half, costing it about $2.5 billion and about 1.1 million units of lost production in 2021, while General Motors (NYSE:GM) has extended production halts at several North American factories because of the shortage.

The bill also includes $1.5 billion in emergency funding to help boost Western-based alternatives to Chinese equipment providers Huawei Technologies and ZTE Corp (HK:0763), aiming to accelerate development of an open-architecture model (known as OpenRAN) backed by U.S. carriers.

Another provision prohibits the Chinese-owned social media app TikTok from being downloaded to government devices "to better safeguard the privacy and security of Americans."

Schumer said the U.S. must address the rising threat from China on many fronts, notably the technology race. "If we don’t step up in a big and bold way, we risk missing out on a generation of good-paying jobs, millions and millions of them," he said.

Senate Democrat proposes $52 billion for U.S. chips production, R&D
 

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Comments (8)
Tre Hsi
Tre Hsi May 19, 2021 9:42AM ET
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I thought Trump said we were going to get all kind of hi tech manufacturing, including chips production, as result of that massive tax break he gave to Foxconn in Wisconsin???
Ronald Warren
Ronald Warren May 18, 2021 11:13PM ET
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Ridiculous!! Let chip manufacturers sell their overpriced stock if they need cash.
Red Riley
Red Riley May 18, 2021 10:58PM ET
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and he thought we were talking lays or pringles
David David
David9 May 18, 2021 10:26PM ET
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Trump has awaken the Sleeping Dragon on chips.... China has identify the problem and they will be get this chip problem solved much much more faster than we can...
Man Up
Man Up May 18, 2021 10:26PM ET
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u mean we as chinese?
Roger Miller
Roger Miller May 18, 2021 9:02PM ET
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Central Planning 101: Rally support for higher corporate taxes, then funnel the money back to the politcally favored corporations, but not before the bureaucrats get a slice.
Benjamin McIntire
Benjamin McIntire May 18, 2021 9:02PM ET
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Youre not wrong
Charles Barnes
Charles Barnes May 18, 2021 7:58PM ET
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Why not give them our shirts too? Let our grandkids pay the bill.
Tyler Sydenstricker
Tyler Sydenstricker May 18, 2021 7:58PM ET
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whats a few more dollars after all the 2020 spending?
Casino Crypt
CasinoCrypt May 18, 2021 6:58PM ET
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The majority of investors believe that its accelerated demand that's causing chip supply issues . Only a few understand the reality that there are actually no chips because the supply chain is nearly in tatters.
Man Up
Man Up May 18, 2021 6:58PM ET
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its actually the opposite. supply is maxed with current capacity worldwide. but its the demand that soared. chip manufacturing factories must run at its max capa at all time non stop for margin. it was disrupted a bit when winter storm hit audtin but just they are operating at 100% again.
danny Levine
danny Levine May 18, 2021 6:51PM ET
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these companies don't need even a dollar of tax payer handouts
Tyler Sydenstricker
Tyler Sydenstricker May 18, 2021 6:51PM ET
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so when they all move for cheaper labor who do wins?
Roger Miller
Roger Miller May 18, 2021 6:51PM ET
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Tyler Sydenstricker I believe most chip production is automated.
Benjamin McIntire
Benjamin McIntire May 18, 2021 6:51PM ET
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Roger Miller i believe in pink unicorns but nobody cares??
 
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