CHIPS and Science Act
The CHIPS and Science Act
Introduction to the CHIPS and Science Act
The long-awaited economic competitiveness package was sent to President Joe Biden for signature on Thursday after Congress approved legislation to encourage local semiconductor manufacture and advance R&D in other science and technology disciplines.
By a bipartisan vote of 243–187, the Congress adopted the legislation that is now known as the “chips and science” bill. Twenty-four Republicans joined all but one Democrat in supporting the proposal. Rep. Sara Jacobs of California, a lone Democrat, cast a “present” vote.
The proposal includes $24 billion to establish a 25% tax credit for new semiconductor manufacturing facilities, as well as $54 billion in grants for 5G wireless deployment and semiconductor manufacturing and design.
The Biden administration’s efforts to lessen reliance on Asian suppliers like Taiwan and South Korea, whose domestic companies are leading the market, as well as to address supply-chain disruptions and ensuing price increases for specific products containing semiconductors, are centered on the chip bill.
The national security ramifications of the bill have been emphasized by Biden’s staff and lawmakers, who claim that they are essential for fighting against and countering China.
A sizable portion of the federal award is anticipated to go to Intel, Taiwan Semiconductor Manufacturing Co., and Samsung Electronics Co. of South Korea, all of whom are currently investing tens of billions of dollars in new chip fabrication facilities in the US.
What is a Semiconductor?
A substance with the properties and capacity to controllably conduct a small quantity of electrical current is referred to as a semiconductor. Semiconductors are substantially less resistant to the current that flows in one direction than in the other.
Semi-conductive materials are found in many solar cells, transistors, and diodes. A semiconductor’s electrical conductivity can be dynamically or permanently controlled across a large range.
Various materials are employed to create a semiconductor. A semiconductor must, in general, neither be an extremely good electrical conductor. nor an extremely poor conductor of electricity. Atoms can be added or subtracted to alter the substance’s qualities. The most popular semiconductor is silicon. Germanium, gallium arsenide, and silicon carbide are a few additional materials utilized in semiconductors.
Now that we’ve got that sorted, let’s get back to the bill.
A comprehensive bill on competitiveness that includes roughly $52 billion to support local semiconductor research and development was signed into law by President Joe Biden on Tuesday. He called it a “once in a generation investment in America itself”
US semiconductor giants are preparing billions of dollars in additional investments as a result of the measure. Prior to the signing, the White House disclosed that Micron Technology Inc. would invest $40 billion in the production of memory chips and that Qualcomm Inc. would collaborate with GlobalFoundries, a chip manufacturing company with a location in New York State, in a $4.2 billion deal. In contrast to the initial 8,000 jobs predicted by the White House, Micron announced on Tuesday that its investments would result in up to 40,000 new jobs in industries including manufacturing and construction. Micron also stated that it anticipates funding through the semiconductor bill. With just this expenditure, the US market share of memory chip production will rise from less than 2% to as much as 10% over the next ten years.
An expansion of GlobalFoundries’ facility in upstate New York will use $4.2 billion from a new partnership between Qualcomm and GlobalFoundries to manufacture semiconductors. The world’s largest fabless semiconductor manufacturer, Qualcomm, has revealed ambitions to raise its domestic semiconductor output by up to 50% over the next five years.
Advantages of The CHIPS And Science Act for USA
It would boost American dominance in the semiconductor industry. The CHIPS and Science Act allocates $52.7 billion for workforce development and American semiconductor manufacturing.
This includes $13.2 billion in R&D and workforce development, $39 billion in manufacturing incentives, including $2 billion for the legacy chips used in cars and defense systems, $500 million for international information communications technology security, and activities related to the semiconductor supply chain.
Additionally, it offers a 25% investment tax credit for costs incurred in the production of semiconductors and associated machinery. These incentives will ensure domestic supply, lead to the creation of thousands of high-skilled manufacturing jobs and tens of thousands of well-paying union construction jobs, as well as hundreds of billions more in further private investment.
It would encourage U.S. supply chain innovation in the telecommunications industry. The CHIPS and Science Act allocates $1.5 billion for the development and adoption of open and interoperable radio access network-based wireless technologies. The U.S. will become a global lead in wireless technologies and associated supply chains because of this investment.
It will strengthen American leadership in the world’s emerging technologies. U.S. technological leadership in fields like biotechnology, computers, and artificial intelligence is essential to both our national security and future economic competitiveness.
Public R&D spending lays the groundwork for future innovations that eventually result in new companies, jobs, and exports.
Giving more Americans the chance to participate in STEM fields and pursue well-paying skilled professions. Education in science, technology, engineering, and mathematics (STEM) and workforce development initiatives are crucial to fostering the development of the abilities required to fill the highly skilled positions in the burgeoning, technologically advanced industries.
The CHIPS and Science Act authorizes new and expanded investments in STEM education and training from K–12 to community colleges, undergraduate and graduate education. This is done to ensure that more people from all backgrounds, all regions, and all communities across the nation, particularly those from marginalized, underserved, and under-resourced communities, can profit from and take part in STEM training and education initiatives
Encouraging STEM and innovation opportunities and equity for all Americans. The legislation authorizes investments to increase the geographic and institutional diversity of research institutions and the students and researchers they serve, including new initiatives to support historically black colleges and universities (HBCUs), other institutions that serve minorities, and other academic institutions that offer opportunities to historically underserved students and communities, primarily through the National Science Foundation (NSF).
The CHIPS and Science Act also increases the geographic variety of financing for research and innovation to better utilize the skills and concepts present across the nation. The legislation also gives organizations and agencies the mandate and resources to address sexual and gender-based harassment in the sciences, which is known to prevent too many Americans from pursuing STEM careers.
The bill would support students, teachers, and researchers at minority-serving and emerging research institutions as well as in rural communities through these investments and initiatives. It would also broaden participation to include people from all backgrounds and experiences, fostering the development of a STEM ecosystem that looks like and benefits all of America.
In addition to increasing funding to $61 billion for its core activities, the National Science Foundation would be in charge of a new $20 billion directorate aimed at speeding the development of technology essential to U.S. security.
The five-year allocation for the Office of Science at the Energy Department would rise to approximately $50 billion to support a number of initiatives centered on sustainable energy, nuclear physics, and high-intensity lasers.
Overall, the second part of the plan, which funds about $170 billion for technology research and development across various federal agencies over the next five years, is generally seen as having local benefits by lawmakers as well.
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