Leahy, Sanders break up on expansive tech innovation invoice handed by US Senate

Bernie Sanders and Patrick Leahy
Sens. Bernie Sanders and Patrick Leahy. File photos by Kit Norton and Glenn Russell/VTDigger

The U.S. Senate reached a bipartisan agreement Tuesday on sweeping legislation to strengthen tech development, manufacturing and research, but Vermont’s senators split on the bill. 

The legislation includes nearly a quarter-trillion dollars in research funding and subsidies, and earmarks over $50 billion specifically for the semiconductor industry. It would make U.S. Department of Commerce grants available to semiconductor manufacturers that agree to improve or create domestic production facilities. 

Sen. Patrick Leahy, D-Vt., praised the bill for its dedication of resources to domestic microchip production, “and for the continuation of chip production in Essex, Vermont.” GlobalFoundries, a New York-based microchip manufacturer with a plant in Essex Junction, is one of the companies that would benefit. 

Sen. Bernie Sanders, I-Vt., said he supported some parts of the bill but had misgivings over the “no strings attached” emergency appropriations available to the semiconductor industry. Sanders voted against the legislation, which passed 68-32. 

“As part of the Endless Frontiers bill, we should not be handing out $53 billion in corporate welfare to some of the largest and most profitable corporations in the country with no strings attached,” Sanders said in a recent tweet

Sanders proposed an amendment to the bill in late May that would have added more conditions to the grant money available to semiconductor manufacturers. 

Among them, the amendment would have prohibited semiconductor companies that receive the money from buying back their own stock, outsourcing jobs or interfering with worker unionizing efforts. No further action was taken on the amendment.

Sanders said he wanted assurances that the investment would be wise, citing reports that the semiconductor industry has closed down manufacturing plants and laid off workers in recent years. 

“Over the last two decades, these very large corporations said, ‘Why do I want to stay in the United States of America, pay workers here a living wage, protect environmental standards?’” Sanders said on the Senate floor in May. “I can go to companies in Asia and elsewhere, and buy my products from them.”

GlobalFoundries, one of Vermont’s largest private employers, has about 2,000 staff members at its Essex Junction plant. IBM, which previously owned the facility, once employed as many as 8,000 people in Vermont. 

GlobalFoundries exterior
GlobalFoundries’ offices in Essex. Photo by Mike Dougherty/VTDigger

The vast majority of the world’s semiconductors are currently produced overseas — particularly in Taiwan, South Korea and China. The United States accounts for only about 12% of global chip production, down from 37% in 1990

And amid a global microchip shortage, the future of the semiconductor industry has drawn both geopolitical and economic interest from the United States and China

The bipartisan bill passed Tuesday “reflects the urgency of addressing the challenges faced by domestic manufacturers and American researchers in our global competition with China,” Leahy said in a statement.  

Leahy said he was encouraged by the “regional technology hub program” that the bill would create at the Commerce Department, which he said “will benefit rural communities in Vermont and across the country.”

Tom Caulfield, CEO of GlobalFoundries, was likewise pleased with the bill, and reiterated support for domestic chip manufacturing.  

“We applaud the United States Senate for its bipartisan commitment to strengthening the domestic semiconductor supply chain,” Caulfield said in a statement Tuesday.

“This investment in semiconductor manufacturing will help pave the way for GlobalFoundries to accelerate our plans to expand in the United States, creating high-paying jobs and increasing capacity,” Caulfield said. 

It isn’t yet clear exactly how much money the company could be in line to receive. 

GlobalFoundries recently partnered with Raytheon, an aerospace and defense company headquartered in Waltham, Mass., to produce a special kind of microchip suited to 5G technology. 

Raytheon’s proprietary “gallium nitride on silicon” technology, which will be shared with GlobalFoundries as part of the agreement, helps to make tiny microchips more powerful by allowing them to withstand more heat and voltage levels. 

“With announcements like this one, I see the potential for the future of American-made 5G and 6G running through Vermont,” Leahy said in a statement to VTDigger at the time. 

Tuesday’s bill, which now heads to the House, also won support from the Semiconductor Industry Association. 

“Senate passage of USICA is a pivotal step toward strengthening U.S. semiconductor production and innovation and an indication of the strong, bipartisan support in Washington for ensuring sustained American leadership in science and technology,” John Neuffer, president and CEO of the Semiconductor Association, said in a statement

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