Yesterday, President Joe Biden signed the bipartisan CHIPS and Science Act legislation into law, intending to increase American semiconductor competitiveness with China. The plan provides billions in tax incentives to stimulate investment in chip manufacturing and more than $52 billion for American semiconductor companies.
In light of the bill, the White House said numerous businesses have announced more than $44 billion in fresh investments in semiconductor manufacturing. $40 million of these investments comes from Micron, and according to the White House, the company’s initiative would create 8,000 new employees and increase the US market share of memory chip production from 2% to 10%.
Critics argue that this bill could result in incentives to private chip companies that previously turned their back on the US. However, President Biden argued that this would not be the case. Ultimately, the goal is to reduce and eliminate the chip shortage that has affected many industries.
China has lobbied against this bill and believes it mimics the Cold War mentality. Given that chip production is required for some weapons, Biden commented that China’s opposition is not unrelated. There is a security risk inherited with the current global chip shortage that must be remedied. Further legislation will be required to appropriate more funding, but this is a start.
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