US Senate pushes domestic semiconductor manufacturing to cut reliance on China

The leader of the Democratic majority in the Senate, Chuck Schumer, this Tuesday night at the Capitol. ELIZABETH FRANTZ (REUTERS)

One of the first symptoms of the seizure of global supply chains was, in early 2021, the temporary stoppage of several automobile plants in the US due to a lack of semiconductors.

That global jam ultimately not only contributed to fueling inflation, but also demonstrated the strategic dependence on China or Taiwan, the main producers of those vital microprocessors for the manufacture of automobiles, mobile phones or robots for medical use.

This Wednesday the Senate has advanced to reduce dependence on China with a bill to subsidize the manufacture of microchips in the US with 52,000 million dollars in subsidies and tax aid.

With 64 votes in favor and 34 against, the bill passed the litmus test of the Senate, where Democratic and Republican seats are tied and in whose hand it is to pass or knock down initiatives that arrive validated by the House of Representatives.

When the draft is final, the text will be submitted to a vote in both Houses of Congress.

The Joe Biden Administration has devoted special attention to the provision of semiconductors, even invoking Cold War-era national security laws.

Making microchips at home is key to countering the might of China, but also dependence on other countries such as Taiwan and South Korea, where a truckers' strike has halted the distribution of goods for several weeks, slowing global supply again.

The fluidity in the supply of microchips began to show warning signs in the last stretch of 2020, as a result of the confinements and the closure of the economy due to the pandemic;

To this were added, successively, the waves caused by new variants of the coronavirus.

Trade tensions between China and the US, although

than during the Donald Trump presidency, have also contributed to making the production and supply of microprocessors one of the main battles in the ongoing trade war.

According to the Taiwanese consulting firm TrendForce, the market demand of the global semiconductor industry reached 89.7 billion dollars (79.076 million euros) in 2021, according to data collected by the EFE agency.

The initiative of the bipartisan group of senators tries, in short, to increase the competitiveness of the US against China, but it also sheds some light on the possibility of understanding between both parties, on issues of national interest.

One of them is, for example, the fight against the monopolistic practices of big technology, which has almost unwavering support from Democrats and Republicans.

In the case of microchips, the lack of political agreement would have meant undoing critical investments in industry and technology, which were on the verge of being canceled in recent weeks after a year of intense negotiations.

Now, thanks to the bipartisan agreement, the Senate is ready to move forward on a broader package that calls for $250 billion in R&D investment in critical technologies, with the goal of concentrating spending on once-thriving and now-prosperous industrial hubs. years ago a scene of marginalization and abandonment.

Led by a Democratic senator, Majority Leader Chuck Schumer, and another Republican, Todd Young, who represents Indiana, the goal of the legislation is to revitalize communities emptied by relocation, an important hotbed of votes for Donald Trump in 2016.

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