The long-awaited Chips and Science Act, which aims to increase semiconductor manufacturing in the United States, was passed by the House 243–187, with no Democrats voting against the bill.
The bill is now going to the White House, where US President Joe Biden will sign it into law. The bill is expected to help the US compete against China, with billions moving toward domestic semiconductor manufacturing.
Biden wrote on Twitter on July 26: “Semiconductor chips are the building blocks of the modern economy – they power our smartphones and cars. And for years manufacturing was shipped overseas. For American jobs and our economy, we These should be made at home. For America the Chips Act will accomplish this.
Some Republicans who opposed the bill claimed it lacked a “guardrail” to prevent any funding falling into the hands of China, while other critics said the US needed to compete in a market currently dominated by Asians. This would require spending several billions. the creator.
However, proponents of the bill argue that America’s economy and national security are essential to producing more chips, which are an increasingly important component in a wide range of items such as consumer electronics, autos, medical equipment and weapons systems.
For example, the Semiconductor Industry Association (SIA) has highlighted key facts on how the Chips Act will help the country. It said semiconductors are important not only to the US economy but also to the nation’s national security and technology leadership.
Further explaining why this act is important, SIA said that semiconductors enable important technologies that will drive the future economy and national security such as AI, 5G/6G, quantum computing, cloud services etc.
SIA said: “The current shortage of chips highlights the critical role of semiconductors in the entire economy – including aerospace, automobile, communications, defense systems, information technology, manufacturing, medical technology and others.”
Meanwhile, noted NASA astronaut and Arizona Senator Mark Kelly said in an interview with Fast Company that the US cannot allow China to become the world leader in semiconductor chip manufacturing.
“We used to make the best chips in the world. We made the first. This stuff was invented here, and we used to have about 40% of the worldwide production. Now we are at 12%. And it is getting worse,” he said.
Intel, which, along with other US chip makers, told the US Congress that they would move their manufacturing facilities to other countries if the CHIPS Act is not passed, would benefit from the bill’s passage.
Intel also delayed starting construction at its $20 billion Ohio fabrication site after Congress rejected prior iterations of the measure.
Now, Intel CEO Pat Gelsinger wrote on Twitter after the vote: “This investment will shape the future of America’s leadership in semiconductor manufacturing and innovation. We’re excited to move full speed ahead to start building #IntelOhio !”
fund distribution
The CHIPS and Science Act, which is meant to create ancillary incentives for the US to produce semiconductors, includes E$52.7 billion in funding for US computer chip makers, as well as tax breaks to encourage investment in chip manufacturing. includes billions more.
According to the bill, $50.0 billion will be allocated for the CHIPS for America Fund over five years. It said the money should be used to implement the Commerce Department’s semiconductor incentives, as well as R&D and workforce development programs.
About $2 billion will go toward Microelectronics Commons, a national network for onshore, university-based prototyping, lab-to-fab transition of semiconductor technologies, Department of Defense-specific applications, and semiconductor workforce training.
According to the bill, $500 million in funding will be allocated to the State Department over five years, in collaboration with the US Agency for International Development, the Export-Import Bank and the US International Development Finance Corporation. It is expected to support international information and communications technology security and semiconductor supply chain activities, including supporting the development and adoption of standards.
Additionally, the National Science Foundation will receive $200 million over five years to promote the development of the semiconductor workforce. A highly skilled home workforce is critical to the success of new and expanded facilities built under the CHIPS Act incentives.
It also includes a $39 billion fund that will assist enterprises that expand or establish new semiconductor manufacturing facilities in the US.
The bill also states that the semiconductor industry is expected to require an additional 90,000 people by 2025.
YD Vasskar, Founder and Director, Vice Biometrics Systems Pvt Ltd, told News18, “Bringing the production activities back to the country will always have good impacts in the long run and the money allocated reflects its importance to every side of the economy. Biometrics, AI, 5G or Robotics.
“But this may seem like an expensive proposition for both the industry and customers,” he said.
Meanwhile, AXL World cofounder Atul Modi said the US aspires to take the lead in technological research and manufacturing based on the way it is focused on chip manufacturing and spending.
“Surround technology will further expand its mobility in emerging areas such as AI, robotics, 5G and biotechnology. This will affect the economic benefits of outsourcing as it will tide over and it can have a cascading effect on different countries,” he said.
chip issue resolution
During the peak of the Covid-19 pandemic, chips were in scarce supply. Factory closures at the start of the outbreak halted semiconductor manufacturing in Asia, while consumer demand for automobiles and better home appliances that require chips has grown throughout the lockdown.
The US produces some of the most advanced types of semiconductors, mostly manufactured in Taiwan, which is at the center of rising political tensions with China.
Therefore, growth in semiconductor manufacturing in the US appears to offset the global supply shortfall for chips, as it created major barriers to buying everything from vehicles to medical equipment during the peak of the pandemic.
Senate Majority Leader Chuck Schumer (D-NY) has claimed that the financing scheme could help fight inflation by making some things cheaper.
While it’s fair to call the law a bipartisan victory, it’s mostly focused on addressing China’s growing investment in its domestic chip industry, rather than addressing current challenges along the tech supply chain.
It should be understood that the chip factories in this package won’t last for years and the act alone may not be enough to spark a long-term semiconductor revolution in America.
Especially when other countries, such as China, South Korea and EU member states, are also ramping up chip manufacturing and investing tens of billions of dollars in trade.
apart from this, India It has also proposed its own ‘Semiconductor Mission’ to become a global chip making hub.
Regarding India’s participation in the race, Pankaj Garg, CEO and Co-Founder of DailyObjects told News18: “In the context of these recent geopolitical developments, India should look inwards and be a part of this $600 billion industry. Must try to claim the place.”
“India already has capabilities like design, prototyping etc. But building an ecosystem to find and create a market for chips will be a gamechanger for the country’s economy,” he said.
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