The U.S. Senate has passed a bill that will sideline $52 billion to support domestic semiconductor production efforts.
The Senate passed the bipartisan US Innovation and Competition Act (USICA) on Tuesday, which also included a 30 percent funding boost for the National Science Foundation, $29 billion to put together a new directorate to focus on applied sciences and $10 billion for transforming American cities into “technology hubs.”
President Joe Biden previously signed an executive order calling for a 100-day government review of semiconductor production efforts and infrastructure in the U.S., the findings of which were published on Tuesday. The White House also announced this week that it had launched a task force to address issues related to critical infrastructure in the country, including for “homebuilding and construction, semiconductors, transportation, and agriculture and food.”
“While these short-term supply chain disruptions are temporary, the president has directed his administration to closely monitor these developments and take actions to minimize the impacts on workers, consumers, and businesses in order to bolster a strong economic recovery,” the White House said in a statement.
A shortage of semiconductors has crippled automotive production throughout North America in recent months, with the Detroit Big Three hit the hardest. The majority of semiconductor chips are manufactured abroad in countries such as China, Taiwan and Japan, which has made it particularly difficult for American automakers to maintain a strong supply of the chips amid the global shortage.
A sharp rebound in automotive sales after the height of the COVID-19 pandemic in 2020, along with increased demand for consumer electronics like laptops and tablets, led to the semiconductor supply pinch. While the effects of the semiconductor shortage are expected to wane in the second half of 2021, some experts predict the shortage will not fully subside until early or mid-2022.