U.S. Senate Democratic Leader Chuck Schumer has unveiled bi-partisan legislation that would spend $52 billion U.S. to boost semiconductor chip production and research over the next five years.
The emergency funding proposal will be included in a more-than-1,400-page revised bill to spend $120 billion U.S. on basic and advanced technology research to better compete with China.
The proposal includes $49.5 billion U.S. in emergency supplemental appropriations to fund the chip provisions that were included in this year’s National Defense Authorization Act, but which require a separate process to garner funding.
President Joe Biden has also called for $50 billion U.S. to boost semiconductor production and research. Supporters of the funding note that the U.S. had a 37% share of semiconductors and microelectronics production in 1990 and that today just 12% of semiconductors are manufactured in the U.S.
The bill includes $39 billion U.S. in production and research and development incentives, and $10.5 billion U.S. to implement programs including the National Semiconductor Technology Center, National Advanced Packaging Manufacturing Program and other research programs.
Last month, Ford Motor Co. (NYSE:F) warned that the current microchip shortage might slash its second-quarter production by half, costing it about $2.5 billion U.S. and about 1.1 million units of lost production in 2021.
In unveiling the legislation, Schumer said the U.S. must address the rising threat from China on many fronts, notably the technology race.
“If we don’t step up in a big and bold way, we risk missing out on a generation of good-paying jobs, millions and millions of them,” he said.