The CHIPS and Science Act combines two bipartisan bills: the Endless Frontier Act, designed to boost investment in domestic high-tech research, and the CHIPS for America Act, designed to bring semiconductor manufacturing back to the U.S. The act is aimed at competing with China as per wikipedia,
The modern world stands on the backbone of technology, with semiconductors playing a central role. As vital components in everything from our smartphones to our defense systems, semiconductors are not only imperative for technological advancement but also for national security. However, the U.S., once a dominant player in the semiconductor realm, now finds its leadership teetering on the brink.
The United States makes 12 percent of the world’s semiconductors, compared with 37 percent in the 1990s, according to US government statistics.
Fast forward to today, and this figure has alarmingly plummeted to 12%. This decline isn't a mere coincidence. Over the years, global competitors have massively invested in their domestic semiconductor industries, with their governments offering enticing incentives. As a result, the U.S. semiconductor industry has faced stagnation in federally funded research. Furthermore, manufacturing a semiconductor in the U.S. has become 25-50% more expensive than in competitor nations, making the U.S. less attractive for such investments.
Amidst these challenges emerges the CHIPS Act of 2022, a proposed legislation aiming to revive the U.S. semiconductor industry. The act not only recognizes the pressing challenges but also offers tangible solutions:
These combined measures are poised to infuse new life into the U.S. semiconductor sector, bolstering its global position.
For those pondering the significance of this act and the industry it seeks to protect, consider this: semiconductors are integral to our daily lives, powering devices we rely upon every day. Moreover, they are critical cogs in the machinery of the U.S. economy and play a pivotal role in national security.
Many companies and ecosystem suppliers have announced investment plans since May 2020, when TSMC announced that it would build a fab in Arizon(before the act passed on August 9, 2022)
July 2021: GlobalFoundries announced a $1 billion investment to construct a new semiconductor fab in Upstate New York.
November 2021: Samsung unveiled plans for a $17 billion semiconductor factory set to commence operations in the second half of 2024, marking the largest foreign direct investment ever in Texas.
January 2022: Intel made an initial $20 billion investment, resulting in the creation of 3,000 jobs, representing the largest investment in Ohio's history. Intel also revealed plans to expand this investment to a total of $100 billion across eight fabrication plants.
May 2022: Purdue University launched the first comprehensive semiconductor degree program in the United States in anticipation of the CHIPS Act, aiming to generate employment opportunities for 50,000 trained semiconductor engineers.
May 2022: Texas Instruments initiated construction on new 300-mm semiconductor wafer fabrication plants in Sherman, Texas, with a projected investment of up to $30 billion and the potential to create as many as 3,000 jobs.
After one year since law has passed:
The CHIPS Act of 2022 is more than just a piece of legislation; it's a clarion call for the U.S. to reclaim its leadership in the semiconductor arena. By recognising the challenges and offering substantial solutions, the act underscores the undeniable importance of semiconductors in today's world. As the debate around the act continues, it remains to be seen how the U.S. will navigate this crucial juncture in the global tech landscape.