US awaits bill to strengthen tech competition with China

US awaits bill to strengthen tech competition with China

President Joe Biden wants lawmakers to complete legislation to increase manufacturing of semiconductors and wireless technologies in the United States

Two US technology competition bills aim to strengthen the supply chain by reducing reliance on overseas manufacturing. The legislation will also boost public investment in technology education as well as research and development.

Last year, the Senate passed its bipartisan $250 billion competition bill, the US Innovation and Competition Act of 2021. The House passed its response to the Senate bill, the America Compete Act of 2022, in January. Now the two bodies are working to create a bill to send to the president for signing into law. In his State of the Union address, Biden called on lawmakers to pass a final bill.

“To compete for the best jobs of the future, we must also level the playing field with China and other competitors,” Biden said. “That’s why it’s so important to pass the bipartisan Innovation Act in Congress that will make record investments in emerging technologies and American manufacturing.”

The final U.S. competition bill will be the first major technology bill in more than 30 years since the Omnibus Trade and Competitiveness Act of 1988, said Rob Atkinson, founder and president of Information Technology and Innovation Foundation. Congress has long neglected investments in science and technology innovation in the United States, he said.

The legislation will funnel billions into semiconductor manufacturing, wireless technology, and a new direction for technology and innovation in the United States. This new group will focus on the research and development of technologies such as AI, autonomous systems and quantum computing.

Growing concern about China and its investments in emerging technologies has prompted a bipartisan group of lawmakers, including Sen. Chuck Schumer, DN.Y., and Sen. Todd Young, R-Ind., to take action to improve US competitiveness, Atkinson said. The COVID-19 pandemic and global chip shortage have also highlighted the challenges facing the U.S. supply chain. Most semiconductor manufacturing takes place overseas, he said.

“It’s certainly on the right track, and it suggests a sea change in how Washington thinks about these issues,” Atkinson said of the US tech competition bills. “It’s all for the best. The question is, is that enough?”

Main beneficiaries

The semiconductor industry will be one of the biggest beneficiaries of this legislation, Atkinson said. Although the House and Senate bills differ, there is agreement on semiconductor funding.

“There is a general consensus in Washington that unless we do something serious there, we will continue to lose production capabilities overseas, and that would lead to serious potential vulnerabilities, including including in matters of national security,” he said.

House and Senate bills allocate $52 billion through the Chips Act to boost semiconductor production in the United States.

There’s no company in the United States making the basic equipment for 5G, and that scares some people in Washington — and it should scare them.

Glenn O’DonnellVice President and Research Director, Forrester Research

Indeed, Intel announced plans last month to invest $20 billion to build two new semiconductor chip factories in Ohio. The company could potentially invest up to $100 billion in semiconductor fabs, which are expected to be completed by 2025.

However, the extent to which Intel is able to build its chip manufacturing facilities is highly dependent on federal funding through the Chip Act, included in the House and Senate competition bills, said. said Keyvan Esfarjani, senior vice president of manufacturing, supply chain and operations at Intel. in one Press release.

Another significant beneficiary of a final technology competition bill in the United States would be communications companies, said Glenn O’Donnell, vice president and chief research officer at research and consulting firm Forrester Research.

“There’s no company in the United States making the basic equipment for 5G, and that scares some people in Washington — and it should scare them,” O’Donnell said.

The House bill allocates $1.5 billion to the Public Wireless Supply Chain Innovation Fund for the deployment of Open Radio Access Network, or Open RAN, equipment with the goal of “boosting the movement toward open architecture, software-based wireless technologies,” according to a fact sheet about the invoice. The Senate bill also allocates $1.5 billion for innovation in 5G and 6G technologies.

Atkinson said there was a “clear commitment” in Congress to move away from dependencies on Huawei, a Chinese multinational tech company that produces telecommunications equipment and other electronics.

Lawmakers will clash over the direction of technology

Where things could get tricky between the House and Senate as they work on a final bill is funding to support a new technology direction.

The Senate bill wants to create an entirely new technology division at the National Science Foundation (NSF), which would focus on emerging technologies. Atkinson said the idea is to focus on technologies that countries like China have also identified as areas to pursue, like quantum computing, but also involve the tech industry more than an NSF model. traditional.

The House bill all but eliminates that idea because it provides less funding over time for a separate, robust technology direction, Atkinson said. While the Senate wants to provide $9 billion a year to the new technology directorate, the House wants to provide $3 billion a year. Given the funding differences, Atkinson expects a major battle over this.

Preparation of a final invoice

It may take some time before the House and Senate agree on a final bill to send to the president, Atkinson said. He said the final bill would likely result in a meeting of the House and Senate amid some issues, such as funding for the technology directorate.

O’Donnell said another struggle for lawmakers is balancing the need to invest in American competitiveness with funding big tech companies.

“The government needs to dance this dance delicately,” O’Donnell said. “Because the last thing they want to do is be seen as handing out big checks to big tech, because most tech companies are just swimming in money. You don’t want to give them handouts because , frankly, they ‘I don’t struggle.’

Makenzie Holland is a news writer covering big tech and federal regulation. Before joining TechTarget, she was a generalist journalist for the Wilmington StarNews and crime and education reporter Wabash Plain Dealer.