A bipartisan group of U.S. lawmakers introduced a bill on Wednesday to provide more than $22.8 billion in aid to semiconductor makers with the aim of spurring the construction of chip factories in the United States in the midst of strategic technological competition with China, according to Reuters news agency. Chip factories can cost up to US$15 billion to build, with much of the cost coming in the form of expensive tooling. The proposal would create a 40 per cent refundable income tax credit for semiconductor equipment, provide US$10 billion in federal funding to match state incentives for factory construction, and provide US$12 billion in research and development funding.

 

 

 

It would reportedly authorise the US Department of Defense to use funds under the Defence Production Act to "establish and enhance domestic semiconductor production capabilities". While a network of "trusted foundries" exists in the US to help supply chips to the US government, many chips must still be sourced from Asia.

 

 

Senator John Cornyn, Republican of Texas, and Senator Mark Warner, Democrat of Virginia, have introduced the bill in the Senate. Aides to Senator Michael McCaul, Republican of Texas, and Senator Doris Matsui, Democrat of California, said the two plan to introduce a version of the bill in the US House of Representatives on Thursday.

 

 

While some US companies such as Intel Corp and Micron Technology Inc still make chips in the US, the industry's centre of gravity has shifted to Asia, where Taiwanese Chinese semiconductor manufacturing company TSMC has more than half of the overall market for contract manufacturing chips and greater control over the most advanced chips. Companies including iPhone maker Apple Inc, Qualcomm Inc and Nvidia Corp all rely on TSMC and other Asian foundries to make chips.

 

 

TSMC said last month that it plans to build a plant in the US state of Arizona.