Jul 27, 2022 - Technology

Chip funding bill staggers toward finish line

Illustration of a man struggling to push a giant semiconductor up a rocky mountain.  

Illustration: Aïda Amer/Axios

A Senate vote Tuesday teed up the latest version of Congress' effort to fund domestic chip manufacturing for final approval Wednesday morning and likely, though not certain, House passage by the weekend.

Yes, but: Congress has been deadlocked on this issue for over a year now, and has only reached this point after intense lobbying and by prioritizing the chips bill over many other proposals — including virtually all of those that involve the tech world.

The big picture: Time was, passing bills that spend money to support domestic manufacturing was an easy lift for Congress. Today, it requires a year of Herculean effort.

  • Meanwhile, a legion of other tech-related proposals and bills are essentially stuck on hold at a moment when Congress is about to go on recess. When lawmakers return, we'll be in the midterm election season — when Congress has rarely gotten much done, even before it was so bitterly divided.

Our thought bubble: At this rate, we can expect each two-year sitting of Congress to advance at most a single tech-related law. Choose wisely!

Here's what's in the Senate version of the bill:

  • $52.7 billion for chip manufacturing, research and production, including $2 billion for legacy chip production — those essential to the auto industry and the military.
  • a 25% tax credit for investments in semiconductor manufacturing, worth about $24 billion.
  • $1.5 billion for the development of open-architecture, software-based wireless technologies, known as ORAN, that's meant to reduce reliance on foreign telecommunications equipment.

The bill also authorizes roughly $200 billion for scientific research, but doesn’t actually appropriate the funds, so the spending will require further action from Congress. The authorizations include:

  • $81 billion for the National Science Foundation, to be used in part for a Directorate for Technology, Innovation and Partnerships meant to expand NSF to also fund applied research and commercialization efforts.
  • The NSF authorization is also meant to help bolster the STEM workforce, including establishing an artificial intelligence scholarship-for-service program.
  • Separately, the bill authorizes $50 billion for the Department of Energy’s Office of Science.

What's next: If the Senate passes the bill, it's over to the House, which is scheduled to leave for its August recess after Friday.

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