Biden Signs CHIPS Bill to Boost US Microchip Makers, Jumpstart Car Production
The President called it “a once-in-a-generation investment in America itself.”
President Joe Biden signed the CHIPS and Science Act on Tuesday to provide $52.7 billion in funding for the research and development of semiconductors in the U.S. The purpose of the bill is to jumpstart domestic manufacturing of microchips, raise the United States' global market share of semiconductor production, and ease supply lines crunched by a global shortage of the chips.
The largely bipartisan bill was signed into law on the White House lawn, with CEOs of major U.S. manufacturing companies in attendance. While the auto industry will get quite a boost, this bill should impact every facet of semiconductor manufacturing in the U.S. Biden called it "a once-in-a-generation investment in America itself."
Of that $52.7 billion, $39 billion will incentivize manufacturers to produce semiconductors in the U.S., along with a 25% tax incentive for companies that invest in semiconductor production. That raised some eyebrows from critics, who said the bill was giving corporate handouts to massive companies, instead of boosting the economy. Biden dismissed that notion during the signing of the bill.
“Let me be clear: This bill is not about handing out a blank check to companies. Commerce Secretary Raimondo will be overseeing the key investments of this bill, explaining how she’s laser-focused on the guardrails that will protect taxpayers’ dollars and the interests of the American workers, small businesses, and the communities in which they reside.” Biden said.
Car customers will hope that the bill alleviates the supply chain shortage issues that have plagued the industry for years. There are currently tens of thousands of North American-made cars and trucks sitting in lots awaiting microchips.
The new CHIPS act may be good news for the auto industry by providing some much-needed relief in the supply chains for microchips and semiconductors. The U.S. currently has 2% of the market share in semiconductor manufacturing. Most semiconductor production is done in China and Taiwan and this bill aims to increase the U.S. market share to 10%.
“The United States has to lead the world in the production of these chips for our own safety’s sake, as well as our economic growth.” Biden said.