In an effort to make the American industry more competitive with China, the U.S. Senate voted 64-32 on Tuesday to advance legislation that would significantly increase the nation’s chip production capacity.

The measure includes an investment tax credit for chip facilities estimated to be worth $24 billion in addition to around $52 billion in government subsidies for American semiconductor production.

Final passage is anticipated to be voted on by the Senate in the upcoming days, and the U.S. House may do the same as early as this week.

The issue has been framed in terms of national security by the president, Joe Biden, and others, who claim that it is imperative to maintain American production of chips that are critical to a variety of consumer items and military hardware.

The vote, according to Secretary of Commerce Gina Raimondo, “is a signal of the strong bipartisan coalition fighting to make more chips in America. These chips maintain the stability of our economy and national security.

The bill seeks to alleviate a chronic shortage that has hampered manufacturing in a variety of sectors, including automobiles, consumer electronics, medical devices, and high-tech weapons, and forced some businesses to reduce output. Particularly heavily hit has been the auto industry.

Before the vote, Chuck Schumer, the Democratic majority leader in the Senate, claimed that the outbreak “made obvious with merciless clarity how America’s chip scarcity was causing a disaster.”

The vote is a “critical step toward enacting legislation that will improve American chip production and innovation, economic growth and job creation, and national security,” according to the Semiconductor Industry Association.

The plan, which has been in the works for well over a year, was heavily pushed by Biden; a version of it passed the Senate in June 2021 but failed to get traction in the House. This infuriated politicians from both parties who prioritise rivalry with China and problems with the global supply chain.

Critics like Senator Bernie Sanders have referred to the legislation as a “blank check” to extremely lucrative semiconductor manufacturers.

As part of the administration’s virtual meeting with labour leaders and the CEOs of Lockheed Martin Corp., Medtronic PLC, and Cummins Inc.

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