The U.S. medical device industry hailed Wednesday’s Senate vote to appropriate $280 billion over several years to increase domestic production of computer chips, including a special fund to ensure the production of older generation chips used in many medical devices.
The Senate passed the CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act on Wednesday, which would provide more than $52 billion toward semiconductor manufacturing in the U.S. over the next five years. Of that total, $50 billion would go toward semiconductor manufacturing, while $2 billion is earmarked specifically for producing so-called legacy chips that are often used in medical devices.
The bill sets aside a further $100 billion in funding for scientific research, a large portion of which will be disbursed by the National Science Foundation. It also cuts the time it takes to license a new chip-making facility from five years to 18 months, Axios reported.
The bill “will ultimately lead to improvements in patient care, and help to strengthen the United States’ leadership position in medical technology innovation,” Medical Device Manufacturers Association CEO Mark Leahey said in an emailed statement.
The U.S. must have a strong domestic manufacturing base for semiconductor chips and other component parts for medical device manufacturing, said Scott Whitaker, president and CEO of medical technology trade group AdvaMed. “The investments made in this legislation will provide our industry with the long-term support needed to continue serving patients,” he added.
Medtech companies have been grappling with a global shortage of chips since the onset of the coronavirus pandemic in 2020. The limited supply has raised costs, forcing companies into the spot market to buy electronic components, and making it difficult for patients to get some critical devices.
“Any opportunity to bolster American chip semiconductor manufacturing is important, given the supply chain challenges all industries are facing – particularly the medtech industry as it strives to meet historically high demand for life-changing connected devices,” ResMed CEO Mick Farrell wrote in an emailed statement.
ResMed, which has struggled to get enough semiconductors to meet the demand for sleep apnea machines in the wake of a massive recall of competing machines by Philips, also urged chip suppliers to increase their allocation to medical device companies. MedTech Europe, an industry lobby group, recently made a similar request of European regulators.
The Senate bill passed by a 64-33 vote, and will now go to the House, where it has bipartisan support.
Ajit Manocha, president and CEO of the chip industry association SEMI, said in a statement that the bill’s passage is “crucial” in order to bolster the U.S.-based semiconductor supply chain, and “keep pace with industry incentives offered by other regions.”
In a Wednesday statement, President Joe Biden urged the House to “promptly” pass the bill, which he said will create more resilient supply chains.
This article was updated to inlcude a comment from AdvaMed.