U.S. senators passed a sweeping, bipartisan piece of legislation this week that will funnel billions towards manufacturing semiconductor chips and otherwise help fund the tech industry in America.
The Innovation and Competition Act of 2021 establishes investments and incentives aimed at supporting U.S. manufacturing, research and development, and supply chain security for high-tech industries.
The bill includes steps proposed in another act (Creating Helpful Incentives to Produce Semiconductors for America Act) that would provide $52 billion to support semiconductor manufacturing in America. It will give $81 billion for the National Science Foundation between 2022 and 2026, authorize $16.9 billion for the Department of Energy for R&D in energy-related supply chains, as well as bar U.S. diplomats from attending the 2022 Beijing Winter Olympics.
That last measure hints at the wider scope of the bill, which aims to support the American tech industry to prevent a strategic disadvantage to China, per CNBC. Some are even calling it a modern version of the Cold War.
Indeed, that has been a wider theme as Biden’s infrastructure spending plan included money to help make batteries for electric vehicles and find their constituent materials within the U.S. and in countries that it considers allies. Indeed, incentives have made EVs more attractive to Chinese consumers who have adopted the vehicles and allowed the nation’s industry to establish a strong presence in electric vehicle manufacturing.
This bill will be of particular interest to the auto industry, which is struggling with the widespread chip shortage. As many American consumers come out of lockdown, rapidly growing sales have been reported by many automakers. As June rolls around, though, many dealerships are complaining of low inventory.
Automakers have been forced to shut down plants in many cases where chips cannot be supplied. In some cases, automakers have even been forced to produce vehicles without some functions as a result of the supply issue.
The Alliance for Automotive Innovation, an advocacy group, told The Detroit News that it applauded the Senate’s passage of this bill, calling this a “critical issue” that lawmakers are responding to.
