U.S. Lawmakers Propose $25 Billion to Help Chip Industry

U.S. lawmakers proposed an estimated $25 billion in funding and tax credits to strengthen domestic semiconductor production and counter rising technological competition from China.

The effort would support companies building plants in the U.S. and buying chipmaking equipment, while sponsoring research and development into “cutting edge semiconductor” production, according to information provided by the office of Representative Michael McCaul, a Texas Republican.

Versions of bills to be introduced in the House and Senate are sponsored by members of both parties, including Senator John Cornyn of Texas, a top Senate Republican. The $25 billion is an estimate of funds from state and federal sources over a five-year period, according to a congressional aide.

The proposal is aimed at maintaining U.S. leadership in a $400 billion industry that’s become central to President Donald Trump’s trade war against China. U.S. companies such as Intel Corp. have complained for years that overseas rivals benefit unfairly from government support.

The bills call for the State and Commerce departments to create a federal program that would match state incentives offered to companies that build foundries -- facilities that make chips for other businesses. That could provide as much as $10 billion in direct funds, according to the congressional aide, who asked not to be identified because the amounts are still being negotiated. The Department of Defense will contribute by prioritizing research, development and testing of chip technology, according to the proposals.