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$50 Bln New Investment In US Semiconductor Manufacturing As Biden Signs CHIPS And Science Act

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President Joe Biden has signed the CHIPS and Science Act of 2022 into law. This will enable investment of $280 billion in domestic semiconductor manufacturing sector and science and technology innovation.

Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, which will further boost U.S. manufacturing sector and global competitiveness, was approved by the Congress with bipartisan support, an indication of broader support for efforts to kick start domestic semiconductor production in the United States.

Speaking at a Bill signing ceremony at the White House Tuesday, Biden said that the future of the chip industry is going to be made in America.

The Act includes provisions that will help lower costs for American consumers by alleviating the shortage of chips that has driven up prices across the nation; Create hundreds of thousands of good-paying jobs building advanced manufacturing facilities in the United States; End American dependence on foreign manufacturers, especially China; bolster the United States' scientific research and technological leadership, and strengthen economic and national security.

One of the objectives of this key legislation is to counter the growing influence of China in this critical manufacturing sector, especially in view of recent tension between China and Taiwan.

The bill provides a 25 percent tax credit for U.S. facilities that produce semiconductors or chip making equipment, and $52 billion funding for new semiconductor programs. The funding includes $39 billion for grants available to semiconductor manufacturers as well as equipment and materials suppliers, and $11 billion for federal semiconductor research programs.

Business leaders who attended the ceremony announced nearly $50 billion in additional investments in American semiconductor manufacturing.

Micron has announced a $40 billion investment in memory chip manufacturing, critical for computers and electronic devices, which will create up to 40,000 new jobs in construction and manufacturing. This investment alone will bring the U.S. market share of memory chip production from less than 2 percent to up to 10 percent over the next decade.

Qualcomm and GlobalFoundries are announcing a new partnership that includes $4.2 billion to manufacture chips in an expansion of GlobalFoundries' upstate New York facility. Qualcomm, the leading fabless semiconductor company in the world, announced plans to increase semiconductor production in the U.S. by up to 50 percent over the next five years.

Biden said Intel CEO Pat Gelsinger is going to break ground on the next-generation semiconductor factories in central Ohio early this fall.

Tuesday, the Biden Administration announced the launch of a sector-specific interagency expert working group on permitting and related project delivery issues for high-tech manufacturing.

Despite being the inventor of the semiconductor, the United States has been depending heavily on foreign manufacturers in the production of several essential goods - like the semiconductors that power everything from military equipment to cars, to microwaves.

The United States currently produces only 10 percent of the world's supply, and none of the most advanced chips. Instead, it relies on East Asia for 75 percent of global production. The CHIPS and Science Act will unlock hundreds of billions more in private sector semiconductor investment across the country, including production essential to national defense and critical sectors, the White House said in a fact sheet.

According to an analysis, investment in the CHIPS and Science Act will create more than 1 million construction jobs alone over the next six years building semiconductor factories in the United States.

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