Supply chain resilience requires diversification with allies and away from China, witnesses said during a Senate Commerce Committee hearing, but they cautioned senators that improving resilience is complicated, and that government intervention can have unintended consequences. The committee was examining how Commerce Department implementation of the recent China package, once called Endless Frontier, could reduce supply chain failures in the future.
CHIPS Act
The CHIPS and Science Act is a U.S. law signed by President Biden in August 2022. The act authorized approximately $280 billion in funding for domestic research and manufacturing of semiconductors. It included $39 billion to subsidize chip manufacturing in the U.S. and a 25% tax credit for the cost of manufacturing equipment. The bill provided $13 billion for semiconductor research and workforce training. It also invested $174 billion in public sector research in science and technology. The bill was intended to strengthen the resilience of American supply chains and to counter China.
Semiconductor and technology companies are calling for increased federal semiconductor funding amid a congressional push to boost supply chain competitiveness and domestic innovation. The Semiconductors in America Coalition, which includes Semiconductor Industry Association members Apple, Microsoft, Google, Amazon Web Services and others, said its “primary focus” is to convince Congress to fund the Creating Helpful Incentives to Produce Semiconductors for America Act (see 2102180062), a bill passed earlier this year.
Sen. Chris Van Hollen, D-Md., and Sen. Roy Blunt, R-Mo., are promoting a bill they say should guide government investments in advanced manufacturing or industrial research, and should be a companion to the Endless Frontier Act. The National Strategy to Ensure American Leadership (SEAL) Act would ask the National Academies of Science, Engineering and Medicine to identify which technologies will be the critical ones in the next five to 10 years, where if the U.S. is not a strong player, it could hurt the economy.