Demand for semiconductors, the heart of all modern electronics, has exploded during the pandemic, causing global shortages further exacerbated by the closure of Chinese factories.
The Senate adopted on Wednesday July 27 a bill which provides 52 billion dollars to revive the production of semiconductors in the United States, a text which must still be ratified by the House of Representatives.
These amounts are included in a larger law, which also allocates more than $100 billion over five years for research and development. 64 out of 100 senators, Democrats and Republicans, voted for the “Act and science chips“. “The Senate Passed Historic Legislation That Will Cut Costs and Create Jobs“, immediately commented President Joe Biden, calling on the elected members of the House to pass the law”rapidly“.
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Demand for semiconductors, at the heart of all modern electronics, has exploded during the pandemic, causing global shortages further exacerbated by the closure of Chinese factories in the face of Covid resurgences. Supply problems for these chips, present in both smartphones and helicopters, have, according to the government of Joe Biden, fueled galloping inflation in the country. In particular, they slowed down the production of new cars last year, causing prices to soar in the automobile industry.
Threat to national security
The United States’ dependence on factories mainly located in Asia also poses a threat to national security, with many military equipment operating using these chips, the government notes. Despite an observation shared by Democrats and Republicans on the imperative of reviving national production, the elected representatives of Congress failed for months to agree on a definitive text. With regard to microprocessors, the bill finally provides 39 billion dollars in aid to encourage companies to produce locally, and 13 billion for research laboratories. Several manufacturers have already indicated that they will use these funds to build factories in Ohio or Indiana.
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Senator Bernie Sanders, a figure of the American left, was moved before the vote on the sums allocated to companies “profitable“which, according to him, “closed 780 factories in 20 years” in the USA. “It’s a bribe to keep them here“, he wrote in a press release. President Biden, however, promised on Monday that the law “was not a blank check“. According to him, companies will have to meet certain conditions, particularly in terms of wages, to receive this public aid. “We will not allow them to use these funds to redeem shares or pay dividends“, he added, specifying that he himself would give the green light to the largest amounts.
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