WASHINGTON, D.C. — The U.S. Senate voted to include an amendment cosponsored by U.S. Senators Susan Collins (R-Maine) and Angus King (I-Maine) which would support the production and development of microelectronics in the United States in this year’s National Defense Authorization Act. The amendment, which was approved by a vote of 96 to 4, mirrors the American Foundries Act of 2020, legislation introduced by the Senators and a bipartisan group of their colleagues earlier this month.

“Semiconductors are not only essential to keeping our country on the cutting edge of technology, but are also vital to maintaining our national security,” said Senator Collins.  “This industry supports hundreds of good-paying, high-tech manufacturing jobs at two factories in South Portland.  Although the U.S. semiconductor industry has been an international leader for decades, aggressive incentives by foreign governments and unfair business practices have eroded America’s dominance in this crucial sector.  The targeted investments provided in our amendment will help spur the research and development necessary to keep U.S. semiconductor companies at the forefront of the industry.”

“America’s technological prowess is a key source of economic innovation, and a vital building block of our national security – we cannot and must not undercut either by outsourcing the manufacturing of semiconductors,” said Senator King.  “We need to be investing in these capabilities, to ensure that we are able to remain leaders in the world of microelectronics and to support good, high-paying jobs in communities across the country. The passage of this amendment will advance that goal, and provide a major boost to hundreds of Maine jobs.”

The United States revolutionized the microelectronics industry, inventing many of the key technologies that drive the economy today. However, it is at risk of falling behind in manufacturing or “fabricating” semiconductors at home as countries in Asia, especially China, have made significant investments in their microelectronics sectors. Seventy-eight percent of cutting-edge wafer fabrication capacity is now located in Asia; North America fell behind China in this benchmark for the first time in 2019. 

The American Foundries Act would make critical investments in commercial and defense-related microelectronics projects to ensure the United States remains a world leader in the industry. The bill includes the following measures:

·       Support for Commercial Microelectronics Projects: Authorizes the Department of Commerce to award $15 billion in grants to states to assist in the “construction, expansion, or modernization … of microelectronics fabrication, assembly, test, advanced packaging, or advanced research and development facilities.”

·       Support for Secure Microelectronics Projects: Authorizes the Department of Defense to award $5 billion in grants “for the creation, expansion, or modernization of one or more commercially competitive and sustainable microelectronics manufacturing or advanced research and development facilities capable of producing measurably secure and specialized microelectronic” for defense and intelligence purposes. This funding may go to primarily commercial facilities capable of producing secure microelectronics.

·       R&D Funding: Authorizes $5 billion in R&D spending to secure U.S. leadership in microelectronics. Requires agencies that receive this funding to “develop policies to require domestic production, to the extent possible, for any intellectual property resulting from microelectronics research and development as a result of these funds.”

·       $2 billion for DARPA’s Electronics Resurgence Initiative

·       $1.5 billion for the National Science Foundation

·       $1.25 billion for the Department of Energy

·       $250 million for the National Institute of Standards and Technology

·       National Microelectronics Research Plan: Establishes a subcommittee of the President’s Council on Science and Technology to produce a report each year “to guide and coordinate funding for breakthroughs in next-generation microelectronics research and technology, strengthen the domestic microelectronics workforce, and encourage collaboration between government, industry, and academia.”

·       Safeguards: Prohibits firms owned, controlled or otherwise influence by the Chinese government from accessing funds provided by the legislation.