A bipartisan group of senators introduced a bill that would strengthen US semiconductor supply chains by encouraging domestic manufacture of this key technology and “prevent China from winning the race to produce these chips.”

The bill, called the Facilitating American-Built Semiconductors (FABS) Act (pdf), seeks to fend off the trend that saw the United States’ share in global semiconductor production fall from 37% in 1990 to just 12 % today.

“Up to 70% of the cost difference for semiconductor production abroad is due to foreign subsidies rather than comparative advantages,” the senators wrote in a June 17 statement. “The Senators’ Bill would close this gap by encouraging semiconductor production in the United States. “

The legislation seeks to amend the Internal Revenue Code of 1986 to establish an investment credit in semiconductor manufacturing.

“Our bill would provide a large investment tax credit to companies that make chips here at home, rather than overseas,” said the bill’s co-sponsor and chairman of the committee. Senate Finance Officer Ron Wyden (D-Ore.), in a statement.

“The United States cannot allow foreign governments to continue to attract manufacturing companies abroad, increasing risks to our economy and costing American workers well-paying jobs,” Wyden added.

According to the text of the bill, the tax credit for a given tax year would be 25% for an investment in a semiconductor manufacturing facility and an additional 25% for investments in manufacturing properties. semiconductors.

“As we have seen amid the global semiconductor shortage, this supply chain is both absolutely critical and increasingly vulnerable,” said Sen. John Cornyn (R-Texas), who co-sponsored the bill, in a statement. “This legislation would help us bring semiconductor manufacturing back to American soil, ensure future leadership in semiconductors, and prevent China from winning the race to produce these chips.”

Besides the incentive for the production of semiconductors themselves, the bill also includes incentives for the production of specialized tooling equipment necessary for the production of chips.

The other co-sponsors are Sens. Mike Crapo (R-Idaho), Mark Warner (D-Va.), Steve Daines (R-Mont.) And Debbie Stabenow (D-Mich.).

The proposed FABS law follows a 100-day supply chain review (pdf) conducted under President Joe Biden’s Executive Order 14017, “America’s Supply Chains.”

The report calls for a number of measures to address the current semiconductor shortage, including encouraging the manufacture of US chips through federal financial assistance, providing R&D resources to help push emerging technologies out of the lab. market, by stimulating the talent pool of potential employees in the semiconductor industry, and protecting the United States’ technological advantage in chip manufacturing by strengthening export controls on key technologies.