• CHIPS and Science Act law authorises funding to boost domestic semiconductor manufacturing in the United States
• Law will structurally support the US in maintaining its leadership position in future technologies
• Funds will be subject to stringent conditions requiring recipients to refrain from constructing certain facilities in China

On Tuesday, President Joe Biden signed the Chips and Science Act  . The law authorises a $280 billion package, including $52 billion in funding to boost domestic semiconductor manufacturing in the United States. Law will revitalise American innovation and aid in the fight against Chinese technological dominance.

The law will strengthen American manufacturing, supply chains, and national security, as well as invest in R&D, science, and technology. It will structurally support the US in maintaining its leadership position in future technologies such as nanotechnology, clean energy, quantum computing, and artificial intelligence. The CHIPs and Science Act will make strategic investments that will enable America to compete with China and win the future.

Funds will be subject to stringent conditions requiring recipients to refrain from constructing certain facilities in China and other countries of concern, as well as from using taxpayer funds for stock buybacks and shareholder dividends.

Micron, the Global Chipmaker, is investing $40 billion in memory chip manufacturing, which is critical for computers and electronic devices. Qualcomm and GlobalFoundries have announced a $4.2 billion partnership to manufacture chips in an expansion of GlobalFoundries’ upstate New York facility.

Although America invented the semiconductor, it now produces only about 10% of the world’s supply—and none of the most advanced chips. Instead, East Asia accounts for 75 percent of global production. The law will also ensure that the United States maintains and advances its technological and scientific lead. At the height of the moon race in the mid-1960s, the federal government invested 2% of GDP in research and development. By 2020, that figure had dropped to less than 1%.

Bill is a strategic step in recognising the need that future of American dominance in World affairs needs structural and fundamental rethinking in a fast-changing geopolitical World. America needs dominance and self-reliance in critical technology and control over supply chain to counter Chinese threat.  

Galactik Views