US pushes space chipmaking initiative to counter China’s technological rise

Washington, June 12 (IANS) A bipartisan group of US lawmakers has introduced legislation aimed at boosting semiconductor manufacturing in space, arguing that the United States risks falling behind China in a critical area of advanced technology.

The proposed Semiconductor Superiority Act, which has been introduced by Republican Senator Ted Budd and Democratic Senator Michael Bennet, would clarify that semiconductor manufacturing facilities operating in low-Earth orbit are eligible for tax incentives under the CHIPS and Science Act.

Supporters of the measure say the legislation would remove uncertainty for companies investing in microgravity-based semiconductor production and help the United States compete with China, which lawmakers say has already incorporated space-based chip fabrication into its supply chain.

“Every day, over 300 million Americans utilize semiconductor chips, whether in smartphones, televisions, bank ATMs, or home appliances, but now that China has already implemented space-based chip fabrication into its supply chain, the US is at risk of losing our global competitive edge,” Budd said.

“The Semiconductor Superiority Act gives domestic manufacturers the green light to develop microgravity semiconductor technology to compete with China. Given that several American companies are already investing in the equipment, launch capacity, and advanced chips manufacturing, we already have momentum, and we cannot afford to stall,” he said.

The legislation would amend Section 48D of the Internal Revenue Code to ensure that advanced manufacturing facilities located in outer space, including low-Earth orbit, qualify for federal advanced manufacturing investment tax credits.

Backers of the bill say manufacturing semiconductors in microgravity could reduce defects in crystal growth and material deposition, potentially increasing production efficiency and yields.

Bennet said the United States must move quickly as global competition intensifies.

“Colorado’s aerospace industry makes our state a natural leader for space-based semiconductor manufacturing due to our talent, research institutions, and aerospace ecosystem,” he said.

“China is already racing to manufacture semiconductors in space. We cannot afford to fall behind. We must act now to protect our competitive edge and drive the next generation of innovation. I look forward to working with my colleagues to pass this bipartisan bill into law,” Bennet added.

Companion legislation has also been introduced in the House of Representatives by a bipartisan group led by Representatives Vern Buchanan, Terri Sewell and Suzan DelBene.

Sewell said the measure would strengthen US leadership in both advanced manufacturing and space technology.

“The Semiconductor Superiority Act is an investment in American ingenuity that will help strengthen our national security, support high-paying jobs, and position the United States to lead in emerging industries,” she said.

DelBene described space as the next frontier in semiconductor production.

“The next frontier of chipmaking is space, where the absence of gravity enables superior semiconductor development,” she said.

“By incentivising the investment in these critical technologies, the US will continue to shape the future of the global economy.”

According to the bill, equipment and infrastructure supporting semiconductor manufacturing facilities in space would qualify for tax incentives, while rockets and launch vehicles used to carry payloads into orbit would remain excluded from the credit programme.

The legislation comes as Washington and Beijing intensify competition over advanced technologies, including semiconductors, artificial intelligence, quantum computing and space systems. US policymakers increasingly view semiconductor production as a strategic national security issue because advanced chips are essential for military systems, communications networks and next-generation computing.

–IANS

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