Schumer, top Democrats push $250 billion computer chip investment bill

WASHINGTON – As the COVID-19 pandemic exacerbates supply chain backlogs and global computer chip shortages, Democratic leaders in Congress as well as President Joe Biden want Congress to fast track a $250 billion bill to develop American independence from China and other competitors in chip manufacturing.

“Sen. Schumer wrote this legislation with upstate New York always at the forefront of his mind,” Schumer’s spokeswoman Allison Biasotti said. “We are already seeing the excitement in major employer expansions and thousands of jobs on the horizon from GlobalFoundries’ planned expansion (in Malta) and (his) push for Albany Nanotech to be a hub for the National Semiconductor Technology Center.”

A focal point of the bill, which the New York Democrat co-sponsored with Sen. Todd Young, R-Ind., is a historic $52 billion investment in stateside semiconductor research and development to address a global chip shortage plaguing the automotive industry. 

Lawmakers began to focus more on the low domestic production of semiconductors when the COVID-19 pandemic cut off supplies from overseas. Without access to chips, several automakers shut down their production lines, and manufacturers of essential medical devices and consumer electronics struggled to meet increasing demand.

Roughly 12 percent of the world’s semiconductors are manufactured in the United States, down from 37 percent in 1990, according to the Semiconductor Industry Association.

Though the Senate passed the five-year investment plan 68-32 in June, the House version of the bill stalled last year when lawmakers clashed over provisions tacked onto the measure. Opponents criticized its high price tag and inability to generate immediate economic improvements.

Schumer and House Speaker Nancy Pelosi announced in November a plan to use a conference committee after House approval to reconcile differences in the two versions.

As the House and Senate have geared up after the holiday break, House Democratic staffers as well as some experts say House leadership is on track to act on the bill soon.

“It seems like this week there’s finally been some movement,” said Jake Harrington, an intelligence fellow at the think tank Center for Strategic and International Studies who has studied U.S. semiconductor policy issues. “It sounds like the House is going to pass through a bill and then, if that happens in the next couple weeks, probably February for a final package.”

Rep. Ro Khanna, D-Calif., who introduced the measure in the House, said he is “thrilled” party leaders are prioritizing the bill.

“We need the House to pass its version of the package so we can get this bill to President Biden’s desk as quickly as possible,” Khanna said. “By advancing research and development and investing in training programs and regional technology hubs, the bill will ensure the U.S. continues to outcompete China and give every American a shot at a good paying job, without having to leave their hometown.”

The semiconductor investment provision, which includes incentives to invest in new manufacturing facilities and would establish a National Semiconductor Technology Center, will likely survive the conference process, Harrington said. 

White House spokeswoman Jen Psaki said in November that Biden considers the legislation “key” to competing with China. 

“It would be an important step forward, an important opportunity, perhaps in a bipartisan manner, to send the message about our commitment to, you know, helping industries and make us more competitive,” Psaki said.

While the House is finalizing its version of the bill, Schumer is already pitching Albany’s robust technological infrastructure to the Department of Commerce. The majority leader recently invited Commerce Secretary Gina Raimondo to tour Albany Nanotech for a second time, building on his years-long campaign for Albany Nanotech to house the National Semiconductor Technology Center outlined in his bill.

Chief Operating Officer Paul Kelly of NY CREATES, the state-run nonprofit that operates Albany Nanotech, anticipates a job boom in Albany if Schumer’s bill becomes law.

While $52 billion would be the largest U.S. investment in semiconductor research to date, Kelly said, it still pales in comparison to the investments made by other nations.

“Foreign parties are also investing and have been investing for years,” Kelly said. “In the grand scheme of things, that number needs to grow in order to really support the manufacturing of semiconductors in the U.S. and give us a competitive edge.”

About 80 percent of semiconductor manufacturing facilities are based in Asia with lower costs of production than U.S. facilities, the Semiconductor Industry Association said.

“That reliance from overseas is going to be detrimental should we have another COVID-like event or any other events that really would impact the supply chain’s ability to keep going,” Kelly said. “We need to … have a domestic supply that is cost-effective so that we don’t have to then pass on the costs to the end consumer.”

Hannah Schoenbaum is a reporter for Medill News Service.

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