US Senate approves 'CHIPS Act' to challenge Chinese dominance in the

Washington: The United States has launched a solid effort to thwart China’s move for dominance in the semiconductor sector. Hence, the US Senate has approved the ‘CHIPS Act’, enabling it to invest in the semiconductor sector extensively. After this approval, the bill will be sent to the House of Representatives, as informed by the sources in Congress. This is the second time in six months that the US Congress has passed a special bill to curb China’s ambitions in the technology sector.

Earlier in February, the ‘America Competes Act of 2022’ bill was approved.

Moreover, China is known as the world’s largest importer of semiconductors. Chinese industry largely depends on European countries, including Taiwan and South Korea. China has invested heavily in producing semiconductors in the last five years to reduce this dependence. However, it does not have advanced technology in this field but has started efforts to obtain that. Looking at the lead taken by China in other elements of the technology sector, China’s dominance in this semiconductor sector can be an alarm bell for the international community.

Subsequently, the West has signalled massive investment and other measures to shake China’s ambitions. America’s ‘CHIPS Act’ is a part of it. The US will provide nearly $75 billion for the semiconductor sector through this bill. Of this, $52 billion will be government grants and $24 billion will be given as tax deductions and investments to the companies setting up’ semiconductor plants’.

The US Senate approved the CHIPS Act last year. But due to the objections and amendments taken by the House of Representatives, many changes had to be made in that. It has highlighted the issue of national security to ease the bill’s passage through Congress. If the bill is not approved, the American economy, national security and interests will be hampered, and the pro-members of Congress will present their position. President Joe Biden has also welcomed the bill.

During the administration of former President Donald Trump, the US administration waged an aggressive diplomatic and trade war against China. Bold decisions targeting Chinese companies, manufacturing and technology were taken during former US President Trump’s tenure. But there were indications that China was being swayed during Biden’s tenure. Against this background, analysts claim that the CHIPS Act’s approval will confirm Biden’s stance against China.