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National News

The United States’ Response to China’s Growth in the Chip Manufacturing Industry

Credit: iStock

Armand Jackson

The global semiconductor chip shortage has negatively impacted many manufacturing industries including automotives and consumer electronics. The pandemic certainly contributes a great deal to the supply shortage but according to Fusion Worldwide, the semiconductor supply chain has been experiencing difficulties for years before the government shutdowns across the globe in response to COVID-19. However, it appears that China’s semiconductor industry has been thriving for the past two years being the biggest buyer of chipmaking gear and outpacing other global regions within the chip making industry in terms of growth. All of this despite sanctions imposed by the U.S. to limit the access of Chinese firms to advanced chip-making gear and technology. 

On top of this, tensions between China and the United States have intensified in recent days over Taiwan, one of, if not the biggest contributor in the global semiconductor industry. The concern amongst some U.S. lawmakers is that if China invades Taiwan then they will control the global market. So, the U.S. Senate, in order to address these developments and bolster the domestic chip industry, finally passed The “Chips and Science” act in a 64 to 33 bipartisan vote, after the bill was in a deadlock for over a year along with protests from China on the bill’s passage. The House of Representatives voted 243-187 Thursday to pass the package and send it to President Biden’s desk.

The legislation is meant to bolster the manufacturing of computer chips in the U.S. in order to mitigate the current and prevent future supply chain issues as well as increase competition with China. provides about $52.7 billion in government subsidies for U.S. semiconductor production and a $24 billion investment tax credit for chip plants estimated. It would also authorize about $200 billion over five years for U.S. scientific research to better compete with China. 

Even though it passed both the House and Senate, Democratic Vermont senator Bernie Sanders disapproved of the bill, and it did not have as much bipartisan support in the House as it did in the Senate since only 24 House Republicans voted in favor of it. These 24 representatives voted against their party leadership who opposed the bill in response to the Democratic party striking a reconciliation deal with West Virginia Senator Joe Manchin. The deal is a deficit reduction package that addresses climate change, prescription drug reform, and would generate $313 billion in new revenue over the next ten years by increasing the corporate minimum tax to 15 percent. 

Nevada Senator Jacky Rosen, in a press release statement on the bill, said: “The computer chip shortage we’ve experienced recently in the United States has impacted nearly every industry and increased costs for Nevadans. As one of the Senators who helped pass this bipartisan bill through committee and now the full Senate, I’m proud that we have taken a historic step to bring manufacturing back to America, create thousands of jobs, enhance our national security, and lower prices for hardworking families in Nevada and across the country.”