The U.S. Senate is due to vote later on Tuesday on a slimmed-down version of legislation to provide $52 billion in subsidies and tax credits for the computer chip industry, over a year after passing its first version of a bill boosting semiconductor competition with China.
The bill is part of U.S. efforts to address an industry-wide chip shortage that has disrupted production in the automotive and electronics industries, forcing some firms to scale back production.
Senate aides said the bill would include a new, four-year 25% tax credit to encourage companies to build plants in the United States in response to growing calls to decrease reliance on other countries for semiconductors.
The Senate’s Democratic majority leader, Chuck Schumer, announced that a first procedural vote would take place on Tuesday, calling U.S. semiconductor manufacturing a matter of national security as well as a source of jobs.
Senate aides said the goal is to pass the bill early next week. They would then send the bill to the House of Representatives, whose approval would then send it to the White House for President Joe Biden to sign into law.
“The message is not subtle: If companies do not think it is profitable to make chips here in America, they are going to go somewhere else,” Schumer said as he opened the Senate on Monday.
Many major weapons also require sophisticated computer chips. Javelin missile systems made by Raytheon Technologies and Lockheed Martin Corp each contain 250 microprocessors. These systems have been in high demand by Ukrainian soldiers as they work to repel the Russian invasion of Ukraine.
