The US is set on surpassing foreign countries in the chip industry, the epitome of supply chain issues in the world. To do that the government needs to incentivize domestic production and provide resources for that to occur successfully. This issue comes to light because China is the leading exporter of this valuable resource and the US has been reliant on their chips throughout the pandemic, which the nation does not like.
As a result, a bill went through Congress calling to subsidize domestic chip production, giving chip companies $52 billion dollars to incentivize boosting their production in the United States. This bill previously went through the House of Representatives and went to the Senate afterward. During President Biden’s time in office, many bills have gone through that first step but collapsed in the Senate due to the ridiculous amount of political gridlock between both parties, so this one had doubts. Fortunately, there was overwhelming bipartisan support, with the final vote being 64-34. The details are unknown, but Democrats are looking to add funding for scientific research into the bill due to the support for the idea. The bill looks to include rules for the companies, with one of them banning the business from using the money to build in foreign countries. Both sides have many things to throw into the bill, so negotiations will continue on for a couple of weeks before both sides can come to an official agreement.
On another note, this bill came into the spotlight due to Nancy Pelosi and her husband’s financial transactions. On Monday, records released showed that Pelosi and her husband bought stock in NVIDIA, one of the largest chip companies, ahead of the vote for the bill. This transaction was made in mid-June, but its announcement right before the vote caused NVIDIA shares to go up since, and it has ruffled the feathers of many investors who are wondering if insider trading is at play.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.