The Senate Passed the CHIPS and Science Act

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WASHINGTON, D.C. — U.S. Senator Bob Casey (D-PA) announced that the Senate, on Wednesday, passed the bipartisan CHIPS and Science Act to create jobs, lower costs, boost domestic manufacturing and strengthen supply chains. The bill invests in American technology, innovation and manufacturing, particularly in the semiconductor industry. Producing that chips in the United States will also benefit the workers in industries that rely on semiconductors from autoworkers to health care workers. From research universities in Western Pennsylvania to national defense equipment factories in Southeastern Pennsylvania, the Commonwealth stands to benefit from this legislation. The CHIPS and Science Act is a critical part of Democrats’ strategy to combat inflation and lower costs for families.

Currently, the United States only produces 12 percent of semiconductors in the world—down from 37 percent in the 1990s—as foreign competitors, including China, are heavily investing in the industry. The bill will help the United States better compete with China, boosting our economy and our national security. The legislation also includes Casey’s Steel Upgrading Partnerships and Emissions Reduction (SUPER) Act to establish the U.S. Department of Energy’s (DOE) first research and development (R&D) program focused on low-emission steel production to strengthen American manufacturing.

“When we lift up American workers, we can outcompete anyone in the world,” said Senator Casey. “The CHIPS and Science Act will enable us to make more products in America, including crucial semiconductor chips to power cars, computers and smartphones. By investing in technology and manufacturing, we will create countless jobs, shore up supply chains and protect our national and economic security.”

The CHIPS and Science Act includes a number of provisions that will support U.S. manufacturing, boost our economy and strengthen national security vulnerabilities, including:

Investments in Semiconductors and Chip Manufacturing

The bill includes $52 billion in investments and incentives for American semiconductor companies to conduct R&D and manufacture chips domestically in the United States. Part of this investment funds an incentive program to focus on legacy chip production to aid industries critical to the American economy, including the auto industry. Funding will also go to the implementation of the National Semiconductor Technology Center (NSTC), National Advanced Packaging Manufacturing Program (NAPMP), and other R&D programs. The NSTC will serve as a hub for conducting advanced semiconductor research and prototyping, while the NAPMP will focus on the challenge of embedding fragile chips into small configurations that combine multiple systems. This will provide long-term benefits to American consumers including lower costs, increased functionality, and improved energy efficiency. The legislation also provides funding to the Department of Defense to support semiconductor investments that are critical to U.S. national security.

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Wireless Telecommunications

The CHIPS and Science Act also includes $2 billion to invest in the Open Radio Access Network (ORAN), helping U.S. wireless networks better compete against Chinese companies Huawei and ZTE. ORAN would create an open wireless network that allows components from different manufacturers to operate on the same network. Investing in ORAN is beneficial to U.S. national security, as the intelligence community has warned that Huawei and ZTE pose significant national security threats, including leaving U.S. companies vulnerable to Chinese surveillance and cyberattacks.

Research and Innovation

Investing in scientific R&D is critical to economic development, public health and national security. As much as 85 percent of U.S. productivity growth in the first half of the 20th century resulted from technological advances. However, U.S. federal government R&D, measured as a percentage of GDP, is near its lowest point in over 60 years. The CHIPS and Science Act invests in R&D and scientific research to spur innovation within specific sectors and in communities across the country. The National Science Foundation will receive $36 billion in additional investments, including funding for STEM education efforts. The bill also invests in the National Institute of Standards and Technology, including funding for Manufacturing Extension Partnership, which supports small- and medium-sized manufacturers. In an effort to diversify the types of communities that are on the frontier of America’s innovation economy, the bill calls for the designation of at least 20 regional technology and innovation hubs throughout the country. The Commonwealth stands to compete for these designations as well as funding through a new program to support growth in persistently distressed communities. Additionally, the Department of Energy’s Office of Science will receive funding for additional research into sustainable transportation, advanced manufacturing, industrial decarbonization, advanced materials, renewable energy spaces and more. The inclusion of Senator Casey’s SUPER Act enables DOE to develop strategies that reduce emissions in steel manufacturing and advances the competitiveness of the American steel industry. The SUPER Act establishes the first crosscutting R&D program dedicated to low-emission steel manufacturing, including efforts to apply R&D on new production methods and public-private partnerships and to commercialize and promote new low-emissions technologies. It also directs DOE to develop a 5-year strategic plan to support research, development and demonstration activities to make technological advancements.

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The CHIPS and Science Act is the latest effort by congressional Democrats and President Joe Biden to fight inflation and bring down costs for American families. The Senate passed the bill at a time when, according to a new Treasury Department analysis, the Biden Administration’s actions have reduced gas prices by about 40 cents per gallon. As of July 26, prices at the pump declined by an average of about 70 cents from their last peak, saving families with two cars about $75 a month. On the same date, oil closed below $95 per barrel after spiking to $122 per barrel in June. The Biden Administration is set to release an additional 20 million barrels of oil from the Strategic Petroleum Reserve to further reduce costs at the pump, and announced a new plan to give oil producers the certainty they need to expand production and lower prices. There is more work to do to lower costs across the board: next week, Democrats plan to bring an historic prescription drug pricing bill to the Senate floor.

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An earlier innovation and competition bill passed the Senate in June 2021. The House passed its version earlier this year. Once the House passes the final version, the bill will head to President Biden’s desk.

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