You may have heard of the “CHIPS Act” in the news recently. Today we discuss the Act and what it means for businesses and consumers.
What is the CHIPS Act?
The CHIPS and Science Act of 2022 is a bipartisan law that encourages microprocessor manufacturing facilities in the U.S. The goal is to reduce U.S. dependence on chip supply chains from overseas while also boosting science and technology research and addressing anti-competitive trade practices from China. Joe Biden signed the measure into law on August 9, 2022.
The bill includes $52 billion specifically marked for semiconductor research and development. Known as CHIPS for America, the program hopes to revitalize the semiconductor industry, spur innovation, and create good-paying jobs.
Why is it important the U.S. manufacture CHIPS?
The two biggest advantages of the U.S. controlling its own CHIP production is the economy and national security.
Semiconductors power our phones, computers and cars and are essential to all technology. Without a steady supply, the U.S. economy would struggle and slow.
With national security, if a hostile nation gained control over a large portion of chip factories it could blackmail foes and threaten nations and their economies. Two-thirds of semiconductor production currently occurs in South Korea, Taiwan and Japan and China is trying to establish a dominant global semiconductor industry.
A number of new chip foundries are already planned for the U.S. within the next three years and more are expected. Intel is building a $20 billion chip facility in Ohio and Micron announced last month it will invest $40 billion over the next 8 years to manufacture chips in the U.S.
With this investment comes jobs and technology and innovation hubs, such as the hubs seen in Austin, Seattle and Silicon Valley.
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