“Today is a day for builders. Today, America’s delivering,” President Joe Biden said at the White House on Tuesday, August 9, 2022, as he signed the CHIPS and Science Act. He called it “a once in a generation investment in America itself.”
The package is worth roughly $280 billion in authorized spending. Of that, $52.7 billion is appropriated for semiconductors, and the rest sets up research programs across the federal government.
The fear behind the bill
Congress had been at it for nearly two years. The House and Senate approved the bill in late July, after a long run of negotiation and political infighting, with the final votes of 64 to 33 in the Senate and 243 to 187 in the House.
A global chip shortage supplied the pressure. U.S. officials worried that without government help, manufacturers would keep building new foundries abroad, leaving little for the U.S. to earn from an industry it pioneered. The Verge pointed to a New York Times report that Intel had approached the Commerce Department about taking over an abandoned factory in China this year. According to the Times, Intel suspended the plan, but those conversations pushed lawmakers to act before their August recess.
In July, Commerce Secretary Gina Raimondo and Defense Secretary Lloyd Austin wrote that chip companies needed to get “concrete in the ground” by autumn. “CEOs of firms all along the supply chain have made clear that the industry is deciding where to invest now,” the letter said, according to CNN.
Where the money goes
The act contains $39 billion for chip manufacturing on U.S. soil, a 25% investment tax credit for the cost of manufacturing equipment, and $13 billion for semiconductor research and workforce training. Intel and other chipmakers building in Ohio and Arizona rely on those subsidies.
Companies that accept the money face a 10-year ban on producing chips more advanced than 28 nanometers in China and Russia.
A further $174 billion is authorized, not appropriated, for public research at NASA, the National Science Foundation, the Energy Department, the Economic Development Administration and NIST. It covers human spaceflight, quantum computing, materials science and biotechnology.
The law grew out of two bipartisan bills, the Endless Frontier Act and the CHIPS for America Act. It is divided into three parts, and the first, Division A, is the CHIPS Act of 2022.
Sources
Sources
- CHIPS and Science Act – Wikipedia
- CHIPS Act signed into law with $52 billion in funding for US foundries
