Senate’s $741B defense bill OK’D; chips in

Globalfoundries, other semiconductor makers will bolster U.S. military

The U.S. Senate has passed a $741 billion defense bill that includes up to $25 billion in support for computer chip manufacturers like Globalfoundries in order to secure a stable future supply of domestic chips for the military.

Despite his previous support for U.S. chip manufacturing, President Donald Trump has threatened to veto the defense spending bill, insisting that it also include a repeal of Section 230, a federal law that protects social media companies from being held liable for what people say on their platforms.

However, the Senate approved the defense bill by 84 to 13, appearing to make it veto-proof if Trump goes ahead with his threat.

The House had previously approved the defense bill earlier this week.

After passing both the House and Senate, John Neuffer, the CEO of the Semiconductor Industry Association, a trade organization that represents 98 percent of the U.S. chip industry in terms of revenue, said that the bill would provide a huge boost to U.S. chip production,

which has consolidated to only a few domestic manufacturers over the past decade.

The U.S. military has been pushing to bolster its domestic chip supply chain as many parts of the industry have moved to China and other Asian countries. The U.S. considers China a major threat to national security.

“Congressional approval of the (defense bill) is a landmark victory for America’s economy, national and supply chain security, and global leadership in the technologies of today and tomorrow,” Neuffer said. “The legislation supports necessary investments in domestic chip manufacturing and research that will help sustain and strengthen America’s long-standing lead in semiconductors and the many technologies they enable.”

Globalfoundries is one of a few U.S. companies that have so-called Trusted Foundry status with the Department of Defense to supply computer chips to the military. The company’s factories in Vermont and Dutchess County have the certification, while its Fab 8 factory in Malta that employs 3,000 people has yet to gain Trusted Foundry status.

U.S. Sen. Charles Schumer of New York and others in Congress have been pushing the U.S. to shore up its chip manufacturing leadership in order to protect its supply from global competition, especially in Asia, including China, where more and more chips are being produced.

With rumors that China has its eyes on retaking Taiwan, the concept is even more important. Taiwan Semiconductor Manufacturing Co. is the world’s largest chip foundry that makes chips for other companies, including

Apple. Globalfoundries is No. 2.

Globalfoundries could be induced to expand Fab 8 if it were able to tap into the new federal subsidies as it seeks to expand its military orders.

“We commend the leadership of the provisions’ dedicated champions in Congress, a bipartisan group led by Sens. Cornyn, Warner, Cotton, and Schumer in the Senate and Reps. Matsui and Mccaul in the House,” Neuffer said Friday.

“We applaud bipartisan Senate approval of the (defense bill) today, as well as House passage with broad support earlier this week, and we urge the president to sign the legislation into law in short order. Doing so will help strengthen U.S. semiconductor technology and keep America at the leading edge of innovation for years to come.”