The US government reached a milestone in its drive to boost local chip production and compete with China as the Senate enacted the CHIPS and Science Act.
US Reached a Milestone in Attempt to Boost Its Chip Production and Compete with China
The US government achieved a significant milestone in its effort to increase domestic chip manufacturing and compete with competitors like China. According to CNBC, the Senate approved the CHIPS and Science Act, a plan to support and encourage American semiconductor manufacturing, by a vote of 64 to 33.
The plan contains tax subsidies to encourage manufacturing investments, over $52 billion for US semiconductor manufacturing companies, and further support for continued technological advancement.
The bill, referred to as "CHIPS-plus," is a condensed form of proposals that Congress was previously considering. Those initiatives encountered criticism from all political camps. Republicans opposed prior efforts, claiming that Democrats were seeking a political reconciliation plan that would consider issues with the environment, healthcare, and taxes. There were also worries that money would unintentionally go to China.
Meanwhile, independent Senator Bernie Sanders expressed concern that a previous version was a "blank check" to chip manufacturers already making money.
Before President Biden signs the bill, the House must pass and reconcile associated legislation. Given the Senate's 60-vote filibuster threshold, it's feasible. Democrats can pass their version with their House majority.
New factories take years to develop, and improvements aren't always swift, so the regulation won't take effect immediately. CHIPS might be vital to American technology as it may also reduce reliance on Taiwan and other semiconductor hubs under pressure from China. The Act may help the US compete in a more competitive market, but it won't guarantee more jobs or lower prices.
House Speaker Nancy Pelosi's plan to visit Taiwan in August is Bad News for China
Nancy Pelosi, the Speaker of the House in the United States, is allegedly planning a trip to Taiwan in August. She will be visiting Taiwan, the top semiconductor producer in the world and the country that supplies the majority of the country's chips. The autonomous island generates 92% of the world's most cutting-edge electronics, including the chipsets that drive most American technology and iPhones.
However, despite the US-Taiwan commercial boom, political ties between the two countries are still tense. The Chinese government in Beijing vigorously opposes any effort by Washington to recognize the Taiwanese administration in Taipei and asserts sovereignty over the island.
As a result of unsubstantiated reports about Pelosi's travel, tensions between the United States and China are now so high that even Washington officials are urging the speaker to stay home.
Zhao Lijian, a spokesman for the Chinese foreign ministry, confirmed Beijing had warned American officials against Pelosi's potential trip in a press briefing on Monday (July 25). "The Chinese side has repeatedly made clear to the US side our serious concern over Speaker Pelosi's potential visit to Taiwan and our firm opposition to the visit," Zhao said.
Pelosi's trip to Taiwan would be the most publicized in years. Beijing has conducted military training near Taipei to counter American efforts to strengthen its political partnership. It threatened violence if Taiwan declared independence.
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