Bid to Accelerate US Chips Permitting Passes Senate as Part of Defense Bill

The Senate approved legislation Thursday intended to speed up construction of US semiconductor facilities by exempting certain projects from often lengthy environmental reviews.

(Bloomberg) — The Senate approved legislation Thursday intended to speed up construction of US semiconductor facilities by exempting certain projects from often lengthy environmental reviews.

The legislation was included in an amendment package to the annual defense policy bill and passed by a vote of 94-3, underscoring the broad bipartisan support for rapidly expanding the country’s semiconductor industry.

The environmental exemption would apply to certain projects that receive grants under the CHIPS and Science Act, which President Joe Biden signed into law last year. None of the law’s $52.7 billion in subsidies have gone out the door, but the promise of funding has already spurred private investment across the country after decades of production shifting to Asia.

The Senate’s version of the defense bill, once passed, must be reconciled with the House-passed version of the measure. A companion permitting bill has already been introduced.

The semiconductor investment, members of both parties say, will help wean the US off foreign technology supply chains while creating good-paying manufacturing jobs at home — a pitch that has become a key part of Biden’s reelection bid.

Several of the permitting bill’s sponsors, including Senators Mark Kelly of Arizona and Sherrod Brown of Ohio, have a home-state stake: The Taiwan Semiconductor Manufacturing Company is building a massive fabrication plant in Phoenix, and Intel has broken ground on a huge facility just outside of Columbus.

Already, skilled labor shortages have forced TSMC to shift back its production timeline to 2025, the company said last week, and Intel has warned that a lack of qualified workers will be also hurdle for its facility.

Read more: Biden’s Vision for US-Made Chips Hits Snag With Arizona Delay

The permitting exemption aims to limit further delays across the sector. To qualify, projects must already be under construction, have state-level reviews at least as stringent as those stipulated by the National Environmental Policy Act, use federal dollars for less than 15% of total costs, or merely expand existing sites — without more than doubling their size.

The goal, says Indiana Republican Senator Todd Young, is to capture as many potential funding recipients as possible.

Environmental advocates, though, worry that the exemption would undermine the purpose of environmental review — and is a harbinger of more rollbacks to come, including on energy permitting.

Read more: Biden Chip Money Sparks Debate Over Plants’ Environmental Impact

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