The CHIPS and Science Act includes funding for companies that make chips in the United States. It is a bipartisan push to reestablish American leadership in a technology that is vital to the US economy.
Although chipmaking was pioneered in the US, and Intel dominated the global market for advanced computer chips for decades, in recent years competition from Asian firms and Intel's own stumbles have seen that influence waned considerably. In 1990 the proportion of chips made in the US was 37 percent, now it's 12 percent. While industry leaders are hopeful that the new funds will help fuel a resurgence, regaining an edge in chip making will require not just money, but spending it the right way.
The US needs to balance short-term investments that shore up capacity with spending aimed at mastering cutting-edge manufacturing, experts say. TSMC and SAMSUNG have a significant lead over their US counterparts. China and other nations are pouring money into domestic chip making. It will be harder to catch up than it is to leap ahead.
The Chips and Science bill is a smaller version of a bill that becamebogged down in political fighting in 2020. It passed the Senate with a vote of 64 to 33, including 17 Republicans, and was approved by the House with a vote of 243 to 186.
Tax incentives designed to spur investments in chip making are included in the legislation. $200 billion is allocated for scientific research into artificial intelligence and other cutting-edge fields. The legislation is expected to be signed by the president before Congress goes on break.
The money allocated for chipmaking reflects the growing importance of chips in every corner of the economy from carmaking to home appliances, as well as the role that Silicon has in driving progress in emerging areas such as Artificial Intelligence.
The legislation was spurred by a global chip shortage that was triggered by spendingmania and supply chain disruptions. Companies have been forced to shut down factories or redesign products because of shortages of cheap but critical components. Some components are in short supply due to the economic downturn.
The US is locked in a race for technological superiority and influence with China and has poured billions into chipmaking in recent years. China lags behind the US and other nations when it comes to cutting-edge chipmaking methods, and the US government has tried to restrict its access to critical manufacturing technology. More advanced drones, missiles, and algorithm that promise to provide a battlefield advantage are enabled by chips.
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