July 29, 2022 1:57pm
Congress passes bill to boost U.S. semiconductor production
The U.S. House and Senate passed the CHIPS and Science Act with bi-partisan support earlier this week, allocating more than $250 billion toward domestic semiconductor manufacturing and scientific research. The passage comes in the wake of chip shortages over the last two years which have led to significant supply chain and product disruptions for the automotive and consumer electronic industries, among others. This was a top priority for GLI and a focus on last week’s DC Fly-In. The shortage has impacted many of the region’s core industry clusters including advanced manufacturing, technology, and electric vehicle manufacturing.
Key provisions of the bill include:
- $52 billion for American companies producing computer chips
- Billions in tax credits to encourage additional investment in chip manufacturing
- $200 million for scientific research in fields like artificial intelligence, robotics, quantum computing and other technologies
- Workforce development grants to build up pipelines of workers in industries hurt by globalization
In addition to the funding and tax subsidies, the bill also includes $10 billion to the Department of Commerce for 20 “regional technology hubs.” This provision, negotiated by Senator Todd Young (R-IN), will identify and invest in technology hubs across the country, linking together research universities and private industry to create centers for technology innovation.
The CHIPS Act represents a significant step to equip American workers hurt by globalization with jobs in cutting edge fields that will also shore up national security by reducing dependence on China. The subsidies are expected to produce tens of thousands of jobs in the short-term and will create research and development and manufacturing jobs in the long-term.
The CHIPS Act now heads to President Biden’s desk where he is expected to sign the measure into law.