US President Joe Biden signs a $280 billion bipartisan bill to boost domestic high-tech manufacturing, part of his administration’s push to boost US competitiveness over China.
The semiconductor firms are announcing billions in investments after President Joe Biden signed a broad competition bill Tuesday that includes $52 billion in domestic semiconductor research and development.
Micron Technology will invest $40 billion in memory chip manufacturing and create 8,000 new jobs, according to a White House fact sheet, and Qualcomm is partnering with GlobalFoundries, which has a facility in New York state, in a $4.2 billion agreement to manufacture chips
US semiconductor companies have begun announcing billions in investments. Qualcomm has committed to spending a total of $7.4bn on purchases between now and 2028 after agreeing to acquire an extra $4.2bn worth of semiconductor chips from GlobalFoundries’s New York manufacturing facility on Monday.
The US market share will increase from 2 percent to 10 percent as a result of Micron’s announcement of a $40bn investment in memory chip manufacture, according to the White House. On Tuesday, Micron said that its investments will generate up to 40,000 jobs in manufacturing and construction, and it anticipates receiving funds from the semiconductor bill.
A continuous chips scarcity has impacted everything from vehicles, guns, washing machines, and video games. As the shortfall continues to affect car makers, thousands of cars and trucks are stalled in southeast Michigan while waiting for chips.
The White House says the government commitment to bolstering high-tech industries is already drawing in large-scale private investors, with some $50 billion in new semiconductor investment alone. The lion’s share of that is a plan announced by US firm Micron to put $40 billion into domestic expansion by 2030.
Biden said at a White House speech that the cash injection from the Chips Act will help “win the economic competition in the 21st century.”
Entrepreneurs are “the reason why I’m so optimistic about the future of our country,” he said, and “the Chips and Science Act supercharges our efforts to make semiconductors here in America.”
One of the Democrat’s key themes since he took office has been the need to revamp US leadership in cutting-edge innovation and rebuild the homegrown industrial base in the face of China’s mammoth state-backed investments.
Of the $52 billion, $39 billion goes toward direct “manufacturing incentives,” for building and expanding semiconductor fabrication plants, or fabs. The money is to be distributed over five years, with $19 billion to be released this year, and $5 billion annually through 2026. The legislation also earmarks $200 billion in research in areas including artificial intelligence and quantum computing.
“This bill is about more than chips, it’s about science as well,” Biden said. “We used to rank No. 1 in the world [in] research and development. Now we rank No. 9. China was No. 8 decades ago. Now they are No. 2.”
Though the legislation marks a landmark investment by the U.S. government in domestic chipmaking, $52 billion in subsidies is a relatively small sum in the world of semiconductor manufacturing, which demands massive amounts of investment.
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