A bipartisan bill years in the making to boost the US semiconductor industry and competition with China will soon hit the Senate floor for a final vote

• The Senate is expected to vote on a bipartisan bill that would boost American chipmaking.
• The measure currently provides $52 billion in government support to the semiconductor industry.

As soon as next week, the Senate is expected to hold a vote on a bipartisan bill that would provide billions of dollars in federal funding to rebuild the US semiconductor industry. It's an effort years in the making designed to boost competition with China, home to one of the fastest-growing chip markets in the world.

The Senate on Tuesday held an important procedural vote that passed 64-34 to clear the way for the legislation to be considered for a final vote. The bill, known as the CHIPS Act, would provide around $52 billion in subsidies and tax breaks to American chip manufacturers to incentivize them to build new factories and bolster production in the country.

"Members of both sides know that America's chips crisis is sending shockwaves across the economy. It is endangering our national security," Senate Majority Leader Chuck Schumer said Thursday. "To ignore the chips crisis means higher costs, squandered job opportunities, greater dependence on foreign chip producers. Thankfully, the Senate is close to finally taking action."

The bill attempts to combat the global chip shortage, largely driven by supply issues caused by the COVID-19 pandemic. It also aims to provide new jobs across a slew of industries that rely on chipmaking, including the automotive, energy, electronics, and transport sectors, to name a few. Computer chips are essential to countless products, from cars to phones to laundry machines and digital services.

"Of course I believe America will lead the way, if this chamber is willing to do what is necessary for our economic and our national security," Schumer said.

The US, once the global leader in chip-making, has faced increased competition from several countries, including China, Taiwan and the European Union, which have poured major investments into their domestic industries.

Commerce Secretary Gina Raimondo has repeatedly warned about China's increased competition and called on Congress to take action in response. American chipmakers, such as Intel, have also urged Congress to reach a deal to help the industry and mitigate the shortage.

"If Congress fails to pass this the next couple of weeks, China wins, America loses," Raimondo told reporters on July 15, according to the Columbus Dispatch. "In fact, China is lobbying against this bill precisely because they know it will make America stronger and enable us to compete. China is not waiting. The rest of the world is not waiting."

Negotiations in Congress have dragged, though both Democrats and Republicans are united in seeking to constrain China's economy. The Senate last year passed a bill to strengthen the semiconductor industry and US research and development, but the House had its own legislation, and neither version became law, CNBC reported.

Yet there appears to be a greater urgency to get something done this time around. If the bill, which has yet to be finalized, is approved by the Senate, it would then head to the House for passage and lastly to President Joe Biden's desk for his signature. The Biden administration has pushed for the legislation to advance before Congress leaves for its summer recess starting in August.