Semiconductor stocks, including Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC), are climbing and getting a great deal of attention from retail investors today. Their rally comes as Reuters reports that the Senate may consider legislation, called the CHIPS Act, to help U.S. based chipmakers as soon as tomorrow. The bill would provide funds and tax breaks to American semiconductor manufacturers.
Republicans May Block the Legislation
Some Senate Republicans may seek to block the legislation tomorrow, as Senate Minority Leader Mitch McConnell, a Republican, has indicated that the GOP will support subsidies for chip manufacturers but it is unclear if his party will support tax breaks for them. McConnell has said that the GOP would block some of Democrats’ pro-industry agenda as long as they seek to advance a budget bill that the Republicans oppose.
Some Chipmakers Could Oppose the Bills
Meanwhile, a number of chipmakers may lobby against the Senate legislation that would potentially aid the sector. They believe that the bills “disproportionately benefits manufacturers like Intel,” Reuters stated, citing unnamed sources.
AMD, Qualcomm (NASDAQ:QCOM) and Nvidia, which do not directly manufacture chips, are supporting separate legislation that’s under consideration in the House. Unlike the Senate bill, which would primarily benefit chip manufacturers, the House’s legislation would directly help the three chip designers. The latter three companies only design semiconductors and pay other firms to manufacture them. The House bill would provide both designers and manufacturers of chips with tax breaks.
Semiconductor Stocks Are Rising, so Are Intel’s Prices
U.S. chipmaker Intel plans to increase the prices on a portion of its products “due to inflationary pressures,” the company told Seeking Alpha. The hikes may be implemented within several months and could range as high as 20%.
The semiconductor stocks rallying in pre-market trading included Intel, up 1.2%, Nvidia, which was climbing 3.6%, and AMD which was advancing 1.9%.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.