Pelosi Optimistic that House, Senate Nearing "Competitiveness Bill" Conference

Jan. 25, 2022

On January 20, 2022, Speaker of the US House of Representatives Nancy Pelosi (D-CA) expressed her hope that the House and Senate will go to conference “soon” in order to sort out and ultimately pass a competitiveness bill. As explained by Pelosi, the domestic development of semiconductors, or chips as they are commonly known, represents a large focus of the legislative push. The need for a House-Senate conference currently stems from differences between the Senate’s US Innovation and Competition Act (USICA) and several similar House counterproposals.

The recent statements from Pelosi follow earlier statements from Pelosi and Senate Majority Leader Chuck Schumer (D-NY), who in November of 2021 promised they would address USICA in a House-Senate conference committee. USICA, it should be noted, is centered on the “Endless Frontier Act,” which in part authorizes increased funding for the National Science Foundation.

While it remains unclear exactly which piece(s) of House legislation will be addressed during the planned conference, during her remarks Pelosi referenced to bills from the House Science, Space and Technology Committee, as well as those generally aimed at providing funding for semiconductor incentives. According to Pelosi, the House bill is “about chips, that funding for chips. It's about research and development … a very big piece of that coming out of our Science, Space and Technology Committee.” Pelosi went on to express her optimism that this “very important” legislation will enjoy bipartisan support. It should be noted that the “NSF for the Future Act” and the “Department of Energy Science for the Future Act” were both passed in recent months by the House Science, Space and Technology Committee.

While the exact pieces(s) of House legislation remains a relative unknown, Pelosi’s statement referencing “funding for chips” appears to indicate that either way the House bill, like the USICA, will look to provide funding for the “Creating Helpful Incentives to Produce Semiconductors in America Act” (CHIPS). While the CHIPS Act, designed to incentivize domestic semiconductor manufacturing and research and development, was enacted as part of the fiscal year 2021 National Defense Authorization Act (NDAA), it has yet to receive funding. As things currently stand, the USICA aims to provide $52 billion in CHIPS Act funding over the course of the next five years.

The continued push to secure funding for the CHIPS act comes as just last week Intel Corp. announced it will invest as much as $100 billion USD in Ohio “to establish a new epicenter for advanced chipmaking in the Midwest” which, according to Intel, has the potential to become “one of the largest semiconductor manufacturing sites in the world.” This move follows a previously announced $20 billion USD investment into one of its existing Arizona facilities. According to Intel’s vice president of public affairs and sustainability Todd Brady, US reliance on semiconductors being built overseas, potentially in areas with geopolitical risk, puts US supply chains at risk. According to the Semiconductor Industry Association the total US share of chip manufacturing dropped from 37% in 1990 to 12% in 2021. Asia is currently home to roughly 75% of the world’s total semiconductor manufacturing capacity.

If you have questions relating to the CHIPS Act, or any piece of legislation referenced in this article, do not hesitate to contact an attorney at Barnes, Richardson & Colburn LLP.