U.S. senators draft $52 billion semiconductor funding deal, Reuters reported

A group of U.S. senators are working on to unveil a $52-billion proposal to boost semiconductor production and research in the U.S. over five years, Reuters reported on Friday, citing sources familiar with the matter.

Senators Mark Kelly, John Cornyn, Mark Warner and Tom Cotton have been negotiating to address the issue of chip shortages that is impacting the different industries, especially automotive, along with the rise of Chinese semiconductor production.

The funding is expected to be included in a bill to spend more than $110 billion on basic U.S. and advanced technology research to compete with China.

Democratic Leader Senator Chuck Schumer told Reuters the Senate would take up the technology bill known as the ‘Endless Frontier Act’ next week that will emphasize investment in the American semiconductor industry, to “ensure that China pays a price for its predatory actions, and boost advanced manufacturing, innovation, and critical supply chains.”

The draft summary includes $49.5 billion in emergency funding, among which $39 billion will be an incentive on production and R&D and $10.5 billion to implement programs including the National Semiconductor Technology Center, National Advanced Packaging Manufacturing Program, and other R&D programs, the report said.

The draft is based on the chip provision that was included in the National Defense Authorization Act, which was passed in January this year. The Act authorizes federal incentives to promote chip manufacturing and federal investments in the research.

“There is an urgent need for our economic and national security to provide funding to swiftly implement these critical programs. The Chinese Communist Party is aggressively investing over $150 billion in semiconductor manufacturing so they can control this key technology,” the summary says, which was seen by Reuters.

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