Biden signs bill to boost U.S. chip production

President Joe Biden signed a bipartisan bill on Tuesday to provide $52.7 billion in subsidies for the national production of semiconductors to make the country more competitive. 

"The future is going to be made in America," Biden said, calling the measure "a once-in-a-generation investment in America itself."

The new legislation aims to address the shortage of chips that has been affecting the production of several goods from cars to video games, and to bring back a share of the market to the United States.  

Dubbed the Chips and Science Act, the bill with a $280 billion package includes more than $52 billion for U.S. companies that produce computer chips and billions more in tax credits to encourage investment in national semiconductor manufacturing, according to CNBC. 

Additionally, the bill authorizes tens of billions of dollars to be used over the next ten years to boost U.S. scientific research to compete with China. 

“These funds also come with strong guardrails, ensuring that recipients do not build certain facilities in China and other countries of concern, and preventing companies from using taxpayer funds for stock buybacks and shareholder dividends,” said the White House. 

The signing of the bill that spent years in the making took place on the White House’s lawn. The chief executives of Micron, Intel, Lockheed Martin, HP, and Advanced Micro Devices, attended the signing. The governors of Pennsylvania and Illinois, the mayors of Detroit, Cleveland, and Salt Lake City, as well as several lawmakers, were also present. 

The White House also claimed that several companies announced more than $44 billion in new semiconductor manufacturing investments, moves that were spurred by the bill. 

Around $40 billion of those investments is coming from Micron, which is investing in a new memory chip manufacturing initiative that will bring 8,000 new jobs to the country and boost national chip production from 2% to 10%. 

The U.S used to be one of the leading producers of semiconductors, producing up to 40% of the world’s supply at one point. However, the U.S. currently produces around 10% of the world’s supply of semiconductors, while East Asia accounts for 75% of production, according to the White House. 

However, “US officials fear that, without government intervention, chip manufacturers will continue to offshore new foundries to China, leaving little room for the US to profit off of an industry it pioneered decades ago,” reported The Verge.