Semiconductor subsidies bill backed by top Texas Republicans passes in U.S. House and heads to Biden for final approval

Workers inside the clean room of U.S. semiconductor manufacturer SkyWater Technology, where computer chips are made, in Bloomington, Minnesota, in April 2022. (Reuters, Reuters)

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WASHINGTON — The U.S. House on Thursday passed a bill backed by leading Republicans in Texas to encourage domestic semiconductor production, even as most Texas Republicans in the chamber voted against the measure.

U.S. Reps. Michael McCaul of Austin and Kay Granger of Fort Worth were the only Texas Republicans to vote for the bill, along with all the chamber’s Texas Democrats. The bill passed the House by a vote of 243-187-1 after winning U.S. Senate approval earlier this week. It now awaits final approval from President Joe Biden, who supports the bill.

The legislation incentivizes companies that produce semiconductors — chips that power anything from a car to a cellphone — to work in the United States, as concerns mount over China and other countries’ growing influence over the industry. The U.S., once considered a leader in global semiconductor production, has seen its share of chip production wane over the past few decades.

The bill provides $52 billion in subsidies for domestic semiconductor manufacturers and provides a tax credit for investments in semiconductor manufacturing.

The bill had the support of leading Texas Republicans, including Gov. Greg Abbott and House Speaker Dade Phelan, who lauded the bill as an opportunity for job creation in the state. It’s a rare point of agreement between Republicans in Texas and the Biden administration, which has been pushing for months to combat foreign domination of chip production.

“This legislation will assist the United States in cementing a secure semiconductor supply chain, which is vital to our nation’s economy and national security, and better equip Texas to compete for investment in this industry,” Abbott said in a statement last week.

Texas is a hub for semiconductor production, leading the country in semiconductor exports for 11 straight years. Samsung, a leader in semiconductor production, recently filed paperwork suggesting plans to expand its presence in the state by building 11 chip-making facilities in the next two decades. The technology giant announced plans last year to build a $17 billion semiconductor facility in Taylor.

House GOP leadership decided on Wednesday evening to encourage their members to vote against the legislation that had long been considered a bipartisan agreement. The effort failed, as 24 Republicans defied their leadership to vote for the bill, including McCaul and Granger.

That came after Senate Democrats surprised lawmakers when they introduced a sweeping piece of legislation intended to lower health care costs and combat climate change — just hours after the U.S. Senate passed the legislation on Wednesday on a bipartisan vote of 64-33.

U.S. Sen. John Cornyn, R-Texas, helped lead the effort to pass the semiconductors legislation. Ted Cruz, Texas’ junior Republican senator, voted against the bill because of the money distributed to massive corporations.

“I’m all for using the tax code to incentivize manufacturers to build semiconductors in America, but when the federal government simply gives billions of taxpayer dollars directly to massive corporations, it invites cronyism and corruption,” Cruz said in a statement after the bill’s passage.

The bill also faced opposition from progressives who, like Cruz, derided it as a form of “corporate welfare.” Progressive U.S. Sen. Bernie Sanders, I-Vermont, also voted against the bill.


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