After the European Union and China, it is the turn of the United States to adopt a plan aimed at strengthening their production in semi-conductors. Following the Senate vote on Wednesday, the House of Representatives on Thursday, July 28, 2022 adopted – with 243 votes in favor and 187 against – legislation aimed at boosting the competitiveness of the United States and research in the field of semiconductors. The text called “Chips and Science Actis now forwarded to President Joe Biden for promulgation.
$52 billion
The Chips and Science Act provides approximately $52 billion in government subsidies for the production of semiconductors in the United States as well as an investment tax credit for foundries valued at 24 billion dollars, details Reuters. The legislation also frees up more than $200 billion over 10 years to boost American scientific research to better compete with China. Congress has yet to pass separate appropriations legislation to fund these investments, the news agency adds.
This is “exactly what we need to do to grow our economy right now”, Joe Biden said after the vote, CNBC reports. This text has been debated for a long time. Proponents of the bill say it is vital to the economy and national security. Chips are essential components in many products ranging from consumer electronics and automobiles to healthcare equipment and weaponry.
Chips mainly produced in Asia
If Intel has its own factories in the United States allowing it to manufacture its chips, the American does not produce or very few semiconductors on behalf of other companies. Apple, Qualcomm or Nvidia, other major American companies in this sector, therefore rely on foreign manufacturers such as the Taiwanese company TSMC or the Korean Samsung. Most foundries are located in Taiwan or South Korea and flood the global semiconductor market. An addiction highlighted with the shortage that erupted during the Covid-19 pandemic.
Factory closures coupled with strong consumer demand for consumer electronics devices (including smartphones and PCs) and the automotive industry have accentuated the shortage. And the United States’ share of global production has fallen in recent decades as China and other countries have invested heavily in this industry, which raises important sovereignty issues. The purpose of the Chips and Science Act is therefore to stimulate the competitiveness of the United States, particularly against China.
