US signs bill to boost U.S. chips, compete with China

US President Joe Biden on August 9 signed a bill to provide $52.7 billion in subsidies for semiconductor production and research and to boost efforts to make the United States more competitive with China’s science and technology efforts.
Joe Biden signs bill to boost U.S. chips
“The future is going to be made in America,” Joe Biden said, calling the measure “a once-in-a-generation investment in America itself.”

Joe Biden touted investments that chip companies are making even though it remains unclear when the U.S. Commerce Department will write rules for reviewing grant awards and how long it will take to underwrite projects.

Some Republicans joined Biden on the White House lawn to attend the signing of the chips bill that was years in the making in Congress, Reuters news report said.

CEOs of Micron, Intel, Lockheed Martin, HP and Advanced Micro Devices (AMD) attended the signing as did governors of Pennsylvania and Illinois, the mayors of Detroit, Cleveland and Salt Lake City, and lawmakers.

White House said the passage of CHIPS and Science Act of 2022 was spurring chip investments.

It noted that Qualcomm agreed to buy an additional $4.2 billion in semiconductor chips from GlobalFoundries’ New York factory, bringing its total commitment to $7.4 billion in purchases through 2028.

White House also touted Micron announcing a $40 billion investment in memory chip manufacturing, which would boost U.S. market share from 2 percent to 10 percent, an investment it said was planned with anticipated grants from the chips bill.

The bill also includes a 25 percent investment tax credit for chip plants, estimated to be worth $24 billion.

The legislation authorizes $200 billion over 10 years to boost U.S. scientific research to better compete with China. Congress would still need to pass separate appropriations legislation to fund those investments.

China had lobbied against the semiconductor bill. The Chinese Embassy in Washington said China firmly opposed it, calling it reminiscent of a Cold War mentality.

Joe Biden noted the United States needs chips for key weapons systems like Javelin missiles. “It’s no wonder the Chinese Communist Party actively lobbied U.S. business against this bill,” Joe Biden said.

Many U.S. lawmakers had said they normally would not support hefty subsidies for private businesses but noted that China and the European Union had been awarding billions in incentives to their chip companies. They also cited national security risks and huge supply chain problems that have hampered global manufacturing.

White House said US added 642,000 manufacturing jobs since 2021. Companies are investing in America again, bringing good-paying manufacturing jobs back home. The construction of new manufacturing facilities has increased 116 percent over last year.

White House said America invented the semiconductor, but today produces about 10 percent of the world’s supply—and none of the most advanced chips. Instead, we rely on East Asia for 75 percent of global production.

The CHIPS and Science Act will:

The CHIPS and Science Act provides $52.7 billion for American semiconductor research, development, manufacturing, and workforce development. This includes $39 billion in manufacturing incentives, including $2 billion for the legacy chips used in automobiles and defense systems, $13.2 billion in R&D and workforce development, and $500 million to provide for international information communications technology security and semiconductor supply chain activities.

It provides a 25 percent investment tax credit for capital expenses for manufacturing of semiconductors and related equipment.

The CHIPS and Science Act includes $1.5 billion for promoting and deploying wireless technologies that use open and interoperable radio access networks. This investment will boost U.S. leadership in wireless technologies and their supply chains.