The Washington Post

Companies jockey for funds as chips bill faces final Senate vote

- BY JEANNE WHALEN

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.

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 realworld 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 (DWash.), 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.

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.

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