In order to bolster efforts to make the US more competitive with China’s scientific and technology initiatives, President Joe Biden on Tuesday signed a historic law that would pay $52.7 billion in subsidies for US semiconductor manufacture and research.
The move represents “a once-in-a-generation investment in America itself,” according to Biden, who added that “the future is going to be produced in America.”
Even though it’s unclear when the US Commerce Department will create regulations for evaluating grant awards and how long it would take to fund projects, Biden praised the contributions that chip companies are making.
To witness the signing of the long-awaited chips bill in Congress, some Republicans joined Biden on the lawn of the White House.
The signing was attended by politicians, the governors of Pennsylvania and Illinois, the mayors of Detroit, Cleveland, and Salt Lake City, as well as the CEOs of Micron, Intel, Lockheed Martin, HP, and Advanced Micro Devices.
According to the White House, fresh semiconductor investments were encouraged by the bill’s passing. It mentioned that Qualcomm’s commitment to purchasing semiconductor chips totaled $7.4 billion from GlobalFoundries’ New York factory as of Monday, increasing its entire commitment to that point.
The US market share would increase from 2% to 10% thanks to Micron’s $40 billion investment in memory chip manufacturing, which the White House hailed as being planned with “expected funding” from the Chips Bill.
The law also provides a 25% investment tax credit for chip facilities, which is projected to be worth $24 billion, marking a rare significant entry into US industrial policy.
The law grants $200 billion over ten years to advance US scientific research so that it can compete with China more effectively. To pay for those investments, Congress would still need to adopt separate appropriations legislation.
China had opposed the semiconductor bill through lobbying. China “firmly rejected” it, according to the Chinese Embassy in Washington, and compared it to a “Cold War mentality.”
However, they pointed out that China and the EU had been giving their chip companies billions in incentives, despite the fact that many US senators had stated they would typically not approve significant subsidies for private corporations.