President Biden signs CHIPS Act to boost semiconductor production

After successful votes in the Senate and House of Representatives, President Joe Biden signed the CHIPS and Science Act into law. The $280 billion measure will provide significant financial support to American semiconductor companies. It provides $52 billion in tax credits and funding for US chipmakers to expand domestic production. In a rare episode of bipartisan unity, the Senate voted 64 to 33 in favor of the bill. It was later approved by the House of Representatives by a vote of 243 to 187.

“America invented the semiconductor, but over the years we have offshored semiconductor manufacturing. As we’ve seen during the pandemic, when the factories that make these chips shut down, the global economy ground to a halt, driving up costs for families,” Biden said during the ceremony. “A third of core inflation last year was due to high auto prices, which were driven by semiconductor shortages. In the interests of our economy, our jobs, and our national security, we must make these semiconductors back in America.”

The CHIPS and Science Act is not expected to directly affect domestic production. It takes years to build new foundries and upgrade existing ones to increase performance. When Intel recently broke ground on two new $20 billion facilities in Arizona, the company said it would take about three years to complete construction of those facilities.

The signing comes shortly after House Speaker Nancy Pelosi made a trip to Taiwan, despite warnings from China that there would be “firm and strong action” if she continued the visit. Prior to their arrival on the island, Taiwan’s presidential website was apparently shut down by a cyber attack. The self-governing island is home to Taiwan Semiconductor Manufacturing Company, the world’s most important chip foundry. TSMC itself supplies the majority of all semiconductor parts used by US companies.

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