Chips Act kicks off new policy
Bill aims to construct several semiconductor manufacturing sites
WASHINGTON — President Joe Biden on Tuesday signed legislation providing $52 billion in subsidies to the semiconductor industry, kicking off what will be one of the largest industrial development programs the federal government has ever administered.
The long-pursued bipartisan legislation looks set to spur construction of more than a half-dozen big semiconductor manufacturing facilities in the United States, providing more secure supplies of the tiny components that are so important to modern electronics that they are viewed as essential to national security.
The bill also authorizes tens of billions of dollars to support federal research and development and regional tech startups, which the administration hopes will lead to commercial breakthroughs in new fields such as quantum computing and artificial intelligence. Congress must still appropriate those funds, however.
“Today is a day for builders. Today, America is delivering,” Biden said just before signing the legislation in a White House ceremony. “I honest to God believe that 50, 75, 100 years from now, people will look back on this week, they’ll know that we met this moment.”
The funds appropriated for subsidies come amid acute global shortages of computer chips, caused by soaring demand and a lack of investors willing to build the multibillion factories needed to make the components. The lack of supply has hobbled automakers and other manufacturers that use chips, forcing them to cut production.
The federal funds won’t solve those shortages in the short term but will incentivize big construction projects by Intel, Taiwan Semiconductor Manufacturing Co., Micron, GlobalFoundries and others that aim to build chip factories in the coming years.
The United States depends heavily on Asia and particularly Taiwan for its chips manufacturing, a reliance that has worried U.S. officials as tensions with China rise. The Commerce Department will be responsible for overseeing the subsidies program and is in the process of hiring new staff that could include a few dozen people.
The United States isn’t new to industrial policy, through which the government intervenes in the economy to support sectors it believes are critical to national security and growth. Heavy federal research and development spending in the post-war era, for instance, helped the United States invent the semiconductor industry. But industrial policy fell out of fashion in recent decades, often criticized by conservatives as a wasteful form of picking winners and losers.