Congress Passes Semiconductor Legislation

Medmarc Insurance Group

August 4, 2022

President Joseph Biden has signed the CHIPS and Science Act of 2022, legislation that will make $52 billion in subsidies available to U.S. semiconductor manufacturers and billions more toward basic research. The U.S. Senate and the House of Representatives both passed the legislation in July, drawing the support of medical device trade associations, such as the Advanced Medical Technology Association (AdvaMed), which lauded the news as a critical development for both patients and medical device manufacturers.

The shortage of semiconductors has been felt not just in the U.S., but in other regions as well. MedTech Europe said in a July 26 statement that immediate action is called for both in Europe and across the globe to prioritize semiconductor allocation to health care products. Other measures endorsed by MedTech Europe are incentives to increase production, and development of regulatory flexibilities to allow the use of substitute computer processing chips and other semiconductor devices under the Medical Device Regulation and the In Vitro Diagnostic Regulation.

Previous versions of this type legislation have been circulating on Capitol Hill for at least two years, an example of which is the CHIPS for America Act of 2020 (H.R. 7178). This bill had the support of 29 members of the House, but never reached the House floor for a vote. A key consideration in these various legislative proposals is that only 12% of semiconductors are manufactured in the U.S., a number that was expected to fall to 10% by the end of this decade. The Semiconductor Industry Association estimates that China provides roughly $100 billion in subsidies to domestic semiconductor manufacturers, a practice that is becoming increasingly common across the globe.

Senate vote short of unanimous

The CHIPS and Science Act passed the Senate in a 64-33 vote, but the legislation had its critics in the Senate. Among those who voted against the bill were Sens. Bernie Sanders (I-Vt.) and Ted Cruz (R-Texas), both of whom viewed the bill as an unnecessary give-away to semiconductor manufacturers. The House of Representatives passed the bill July 28 by a vote of 243-187, and President Biden signaled his support for the legislation in a July 29 tweet stating that he intended to sign the legislation. Biden had observed in an Aug. 2 statement that the legislation will trigger one million new hires in the construction industry over five years just to build the factories needed to manufacture semiconductors. He also cited the impact on small and start-up businesses as another benefit of the investment in semiconductor manufacturing.

The CHIPS and Science Act provides $52 billion in investments and incentives to increase U.S. manufacturing of semiconductors, but adds another $200 billion for research into computer-intensive fields such as artificial intelligence and quantum computing. Of that amount, $20 billion will be applied toward a new office at the National Science Foundation (NSF), the NSF Directorate for Technology, Innovation, and Partnerships. Among the priorities at this office will be cybersecurity, artificial intelligence and biotechnology, all of which are key developments in the field of medical technology.

Many of the House and Senate supporters of CHIPS and Science Act of 2022 cited China’s growth as an economic superpower as a driver of their support for the legislation, but a recent paper from the Massachusetts Institute of Technology clearly outlined the need for the legislation. The authors of this paper asserted that semiconductor fabrication and research are critical to U.S. national security interests, and that academic research can and should play a vital role in restoring the nation’s posture in this sector of the economy.

AdvaMed President/CEO Scott Whitaker said in a July 28 statement that AdvaMed members have vigorously championed investment in U.S. semiconductor manufacturing, and thanked Congress for “making a critical investment the manufacturing, research and design of these critical technologies.” Whitaker made note of the impact of the COVID-19 pandemic on semiconductors, adding that the legislation “addresses long-term issues for our members and the patients they serve by increasing the domestic industrial base for chips, and enhancing access to the kinds of chips critical to the health care system and delivery of patient care.”

For additional resources contact the Marketing department 
Phone: 888-633-6272

Copyright © 2022 - Medmarc

All statements and opinions in this publication are for informational and educational purposes only. None of the information presented should be considered as offering legal advice or legal opinion. We are not liable for any errors, inaccuracies or omissions. In the event any of the information presented conflicts with the terms and conditions of any policy of insurance offered by Medmarc Insurance Group, the terms and conditions of the actual policy will apply.