U.S. lawmakers unveil bid to boost domestic chipmaking industry

[June 26, 2020]  By Alexandra Alper

WASHINGTON (Reuters) - A bipartisan group of lawmakers on Thursday introduced a measure aimed at strengthening chip manufacturing in the United States, adding to efforts to champion the sector and lure high tech supply chains back into the United States.

The measure, backed by top Senate Democrat Chuck Schumer and key Republican Tom Cotton, would offer $15 billion in federal grants to states to build, expand or modernize domestic semiconductor manufacturing and R&D facilities.

It would also authorize $5 billion in federal dollars towards public-private projects to build or modernize fabs that produce "measurably secure and specialized microelectronics" for use by the federal government as well as for critical infrastructure.

An additional $5 billion would be allocated as grants to federal agencies to foment research and development in the sector.

The measure was offered as an amendment to the National Defense Authorization Act, which authorizes U.S. military spending but is used as a vehicle for a broad range of policy matters as it has passed annually for more than 50 years.

However, the bill will be introduced as a standalone on Monday as well to bolster its chances, a Senate aide said.

While approval is far from guaranteed in politically gridlocked Washington, the amendment is part of a growing bipartisan campaign to fuel growth of U.S. chip foundries, as the industry's center of gravity has shifted to Asia.

While some U.S. firms such as Intel Corp and Micron Technology Inc still make chips in the United States, Taiwan Semiconductor Manufacturing Co has more than half of the overall market for contract manufacturing chips and an even stronger hold on the most advanced chips.

Republican Senator John Cornyn and Democratic Senator Mark Warner introduced a bill this month to provide more than $22.8 billion in aid for semiconductor manufacturers to spur the construction of chip factories in America amid a strategic technology rivalry with China.

The Semiconductor Industry Association welcomed the move as overseas governments have offered "aggressive incentives for advanced chip manufacturing to relocate."

(Reporting by Alexandra Alper; Editing by Daniel Wallis)

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