Semiconductor stocks rose Wednesday as the U.S. Senate voted for a bill that would grant U.S. chip manufacturers more than $52 billion in funding to build domestic silicon-wafer fabrication plants and lessen reliance on Asia for production.
On Wednesday, the Senate voted 64 to 33 to pass a measure that could see action in the House and land on President Joe Biden’s desk for signing by the end of the week. The vote puts U.S. lawmakers that much closer to releasing $52.7 billion in funds to help boost domestic silicon-wafer production. That initiative appeared to get caught up in partisan politics, so much so, that Intel Corp.
chose to delay groundbreaking on its fab complex in Ohio.
The PHLX Semiconductor Index
was last up 2.5%, trading as high as 3.2%, while the S&P 500 index
was up 1.3%, and the tech-heavy Nasdaq Composite Index
Benefiting from the bill would be U.S. chip makers who own their own fabs, the super-complex foundries that make the silicon wagers that are used in chipmaking, such as Intel, Texas Instruments Inc.
and Micron Technology Inc.
in addition to third-party fab GlobalFoundries Inc.
Texas Instruments shares rallied 5% Wednesday, also boosted by an earnings beat late Tuesday. Intel shares rose 1.8%, Micron shares rose 1.5%, and GlobalFoundries shares advanced 1.4%.
See also: Here are 15 semiconductor stocks expected to shine through 2024
Fabless chip makers, which use third-party fabs like Taiwan Semiconductor Manufacturing Co.
for their silicon like Advanced Micro Devices Inc.
would not stand to benefit from the funding, but their shares were also carried higher. Nvidia shares were also up 5%, while AMD shares were up 3%. Apple shares were up 1.8%, and Qualcomm shares ticked less than 1% higher ahead of an earnings report scheduled for Wednesday afternoon.
In a statement following the vote Senate Majority Leader Chuck Schumer called building up U.S. chip-making infrastructure a “Sputnik moment,” in which the U.S. finds itself behind the tech curve and seeks to bounce back. Rather than being behind the Soviet Union in space technology as was the case with Sputnik, Schumer said the U.S. finds itself falling behind in chip manufacturing and vulnerable to China, which has been funding chip-making capacity even as the majority of the world’s fab capacity is located in Taiwan, which mainland China considers its territory.
More on the news: Senate advances $52 billion chips bill in 64-32 vote, and House could give its OK by end of week
“While we still have a lot of work to do to boost U.S. competitiveness with China, the Senate passage of this legislation represents an important step in bringing back American manufacturing, shoring up U.S. innovation, and reducing costs for families,” Sen. Mark Warner (D-Va.) said in a statement.
Warner, who chairs the Senate Select Committee on Intelligence, said “I urge my House colleagues to act like our economy and national security depends on it, and send this bill to the president’s desk without delay.”
For the month-to-date, the SOX chip index is up nearly 12%, while the S&P 500 is up 5%, and the Nasdaq is up 7.5%.