President Biden signed the $280 billion CHIPS and Science Act of 2022 into law today to boost domestic high-tech manufacturing and secure U.S. competitiveness over China.
The Biden administration states that the new bill will “strengthen American manufacturing, supply chains, and national security, and invest in research and development, science and technology, and the workforce of the future to keep the United States the leader in the industries of tomorrow, including nanotechnology, clean energy, quantum computing, and artificial intelligence.”
Critically, the CHIPS and Science Act is framed as boosting American semiconductor research, development, and production.
“America invented the semiconductor, but today produces about 10 percent of the world’s supply – and none of the most advanced chips,” the Biden administration states. “Instead, we rely on East Asia for 75 percent of global production.”
The President’s Council of Advisors on Science and Technology (PCAST) have also released new recommendations with regard to semiconductor research and development, including a national training network for semiconductor workforce development, the removal of barriers for technology startups, and setting a semiconductor research agenda with fundamental research goals and challenges going forward.
The bill includes $52.7 billion in new semiconductor research, development, manufacturing, workforce development. Of that sum, $39 billion is earmarked for manufacturing incentives, including $2 billion for legacy chips used in automobiles and defense systems.
The Biden administration also states that the bill puts in place guardrails to ensure facilities are not built in China or other “countries of concern,” and that companies will not be permitted to use taxpayer money for stock buybacks or shareholder dividends.
The legislation follows a widespread call to boost domestic microchip manufacturing amid a global shortage of semiconductors. The shortage has had a profound affect on automakers, including General Motors, which has been forced to curb feature and vehicle availability as supplies of the critical components are secured. It’s estimated that GM currently has 90,000 unfinished vehicles currently waiting for new chips.
Looking ahead, GM is taking steps to develop its own family of microchips to reduce the potential impact of future shortages.