President Biden signs CHIPS and Science Act into law
American semiconductor manufacturing is back, baby!
On Tuesday, US President Joe Biden signed the CHIPS and Science Act into law.
The bipartisan legislation calls for $52.7 billion to advance American semiconductor research, development, manufacturing, and workforce development. In July, the bill passed the US Senate in a 64-33 vote and was approved 243-187 in the US House of Representatives.
In remarks at the White House signing ceremony to turn the bill into law, US Senate Majority Leader Chuck Schumer (D-NY) called the CHIPS and Science Act "the most important thing we have done for America in years if not decades."
Schumer characterized the substantial investment called for under the new law as an affirmation that America's best years still lie ahead.
US Secretary of Commerce Gina Raimondo in a statement called the move "a historic investment that will help revitalize the US domestic manufacturing economy, spur research and development in critical industries, and enable us to continue outcompeting and out-innovating the rest of the world."
The funding includes $39 billion in manufacturing incentives, $2 billion covering legacy chips in vehicles and defense systems, $13.2 billion in research and development as well as workforce training, and another $500 million to secure international information communications technology and the semiconductor supply chain. There's also a 25 percent investment tax credit for capital expenses related to semiconductor manufacturing.
The bill follows long on the heels of the Trump administration's trade war with China, which forced companies in the US, China, and elsewhere to reconsider how they source their semiconductor-dependent products and the geo-political alignment of their manufacturing partners. The tension between the US and China became more evident during House Speaker Nancy Pelosi's recent visit to Taiwan, home to TSMC and the focus of concern about how semiconductor supply chains will work if US-China relations further deteriorate.
"America invented the semiconductor, but today produces about 10 percent of the world’s supply – and none of the most advanced chips," the White House said in a statement. "Instead, we rely on East Asia for 75 percent of global production."
- Chipmakers warned: US CHIPS Act funds are not for 'stock buybacks'
- Qualcomm, GlobalFoundries double down on US chip production
- Midwest universities unite to support US chip industry revival
- Micron pledges US memory expansion after CHIPS Act passes
The CHIPS and Science Act aims to increase US market share in semiconductor manufacturing. The signing of the law elicited praise from technology trade groups.
"This isn’t just a win for tech, this is a win for consumers who’ve struggled to find and afford products during the global chip shortage," said Adam Kovacevich, CEO of The Chamber of Progress, a trade group backed by major tech companies, in a statement. "This kind of historic investment is going to have economy-wide impacts for workers, for entrepreneurs, and for anyone who wants to see the US continue to lead the global tech sector."
Another industry association, SEMI, had similarly nice things to say about all the cash headed toward their members.
"SEMI looks forward to continuing collaboration with the US government and our member companies to ensure timely implementation of these programs to strengthen the US semiconductor supply chain," said Ajit Manocha, SEMI president and CEO, in a statement.
"The CHIPS and Science Act funding will also be instrumental in buttressing the National Semiconductor Technology Center (NSTC), National Advanced Packaging Manufacturing Program and related programs in order to drive chip industry innovations that will better the lives of people around the world."
With the anticipated grants and tax credits made available under the new law, US-based Micron Technology said it plans to invest $40 billion in memory chip manufacturing over the remainder of the decade, creating 40,000 new jobs in construction and manufacturing as a result.
Micron said it anticipates this will increase the US market share of memory chip production from less than 2 percent presently to 10 percent eight years hence.
And on Monday, in anticipation of the signing of the CHIPS and Science Act, Qualcomm and GlobalFoundries yesterday announced they are extending their existing manufacturing partnership, a move that brings $4.2 billion to GlobalFoundries’ upstate New York facility.
The deal specifically extends Qualcomm subsidiary QGT US-based collaboration with GlobalFoundries to make FinFET for 5G transceivers, Wi-Fi, Automotive and IoT products. ®