Intel stock wobbled Monday as Congress haggled over legislation supporting domestic semiconductor production before its August recess.
Senate Majority Leader Chuck Schumer, after returning to the Senate floor following his recovery from Covid-19, said that a procedural vote will be held Tuesday related to a bill geared toward tackling the chip shortage.
Schumer said Democrats and Republicans were hashing out the details so that they can move forward this week.
Intel and other US chip makers have been putting pressure on Congress to move forward on $52 billion in incentives for domestic semiconductor production and development.
Intel (ticker: INTC) stock rose 0.2% to close at $38.71. The stock traded as high as $39.34 before paring gains around noon. The industry benchmark PHLX Semiconductor Index, known as the Sox, fell 0.5%.
Proponents believe investing in domestic production will help alleviate semiconductor shortages, which hamper the supply of appliances and goods that use them, including automobiles, refrigerators, mobile phones, and videogame consoles.
“If you want to help with inflation and get it down, this bill is an important bill to vote for,” Schumer said.
Executives also argue the semiconductor supply chain is over-reliant on chip manufacturers in Asia, which could lead to national security concerns for the US if it loses too much ground to countries such as China.
Though the funding bill is popular on its own, it faced some pressure from Senate Minority Leader Mitch McConnell. He threatened last month to kill a larger China competitiveness bill that included the chip funding if Democrats moved ahead with a separate budget bill passed through a process known as reconciliation.
After Democrats pulled back on plans for climate reform elements in the reconciliation bill, Sen. John Cornyn of Texas said Sunday that the chips bill had a green light to proceed.
Fundstrat Washington policy strategist Tom Block told Barron’s that he thinks it is more likely than not a slimmed down chips bill passes in Congress, though he notes nothing is 100% in DC
He says time isn’t on Congress’ side to pass the legislation before the August recess, but he says lawmakers can find compromise and believes it done.
McConnell, Block says, “needs an exit strategy to his threat that he’ll tie it up.
“He’s got several Republican members who want a bill, because some of these [facilities] are being built in states that have Republican senators and Republican governors. I think there’s just a lot of momentum to get this done,” Block adds.
Intel said in June it was delaying the groundbreaking ceremony of a planned facility in Ohio, citing in part uncertainty over the fate of the chips bill.
Write to Connor Smith at [email protected]
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