Electronic Supply Chain industry research from the Z2Data Team

China Does Not Want This US Chip Bill to Pass

The $52 billion dollar investment passed through the US Senate and aims to quell the ongoing semiconductor shortage by boosting domestic production. China isn't happy about it.
Chase Correll
June 11, 2021

The ongoing electronic component shortage—mainly consisting of semiconductors and advanced chips—has lit a fire under US officials to boost production within the US. Tech conglomerates and scientific leaders have called for action to address the shortage.

In response, the US Senate has approved a major bill, called the US Innovation and Competition Act (USICA), for science and technology that also aims to quell the ongoing chip shortage. The bill will invest billions into multiple STEM industries: artificial intelligence, semiconductor fabrication sites, and quantum computing.

So why does China want to stop the bill?

Because the primary goal of USICA is to boost each of these industries within the US and to reduce reliance on Chinese factories and technologies. Officials from China have gone so far as to urge the US to "immediately stop" all progress toward passing the bill.

The Xinhua News Agency states that the US bill “smears China’s development path and domestic and foreign policies and interferes in China’s internal affairs under the banner of innovation and competition.”

USICA will provide $52 billion in funding for domestic semiconductor production, $29 billion for a new directive focused on applied science, and a 30% funding boost for the National Science Foundation.

The new bill also provides $10 billion to fund "technology hubs" across multiple cities within the US. The hope for these "technology hubs" is to create areas within the US where many STEM workers and academics can congregate to advance American scientific and manufacturing progress.

Yet there are still questions as to whether the House of Representatives will pass the bill.

As of yet, House leaders have not made any public statements in support of the bill. Yet Senate majority leader Chuck Schumer (D-NY) believes USICA aligns with what the House officials have been drawing up and believes Biden will have "a really good product on [his] desk."

Although the bill is unlikely to solve the current semiconductor shortage right away, it does provide a hopeful path forward in the pursuit of fewer shortages in the years to come.

How Z2Data Can Help With Component Shortages

Z2Data's Supply Chain Watch and Part Risk Manager enables companies to increase supply chain and inventory visibility. Companies can readily navigate component shortages by using Z2Data to find alternative supply sites and to receive alerts for potential supply chain disruptions. Increase your sourcing options with a free trial of Z2Data's Part Risk Manager.

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