Arab News, Aug 10, 2022 | Muharram 12, 1444
Biden signs bill to boost US chips, compete with China
WASHINGTON: President Joe Biden on Tuesday signed a landmark bill to provide
$52.7 billion in subsidies for US semiconductor production and research and to
boost efforts to make the US more competitive with China’s science and
technology efforts.
“The future is going to be made in America,” Biden said, calling the measure “a
once-in-a-generation investment in America itself.”
Biden touted investments that chip companies are making even though it remains
unclear when the US Commerce Department will write rules for reviewing grant
awards and how long it will take to underwrite projects.
Some Republicans joined Biden on the White House lawn to attend the signing of
the chips bill that was years in the making in Congress.
The chief executives of Micron, Intel, Lockheed Martin, HP and Advanced Micro
Devices attended the signing as did governors of Pennsylvania and Illinois, the
mayors of Detroit, Cleveland and Salt Lake City, and lawmakers.
The White House said the bill’s passage was spurring new chip investments. It
noted that Qualcomm on Monday agreed to buy an additional $4.2 billion in
semiconductor chips from GlobalFoundries’ New York factory, bringing its total
commitment to $7.4 billion in purchases through 2028.
The White House also touted Micron announcing a $40 billion investment in memory
chip manufacturing, which would boost US market share from 2 percent to 10
percent, an investment it said was planned with “anticipated grants” from the
chips bill.
Progressives argued the bill is a giveaway to profitable chips companies that
previously closed US plants, but Biden argued on Tuesday “this law is not
handing out blank checks to companies.”
The legislation aims to alleviate a persistent shortage that has affected
everything from cars, weapons, washing machines and video games. Thousands of
cars and trucks remain parked in southeast Michigan awaiting chips as the
shortage continues to impact automakers.
A rare major foray into US industrial policy, the bill also includes a 25
percent investment tax credit for chip plants, estimated to be worth $24
billion.
The legislation authorizes $200 billion over 10 years to boost US scientific
research to better compete with China. Congress would still need to pass
separate appropriations legislation to fund those investments.
China had lobbied against the semiconductor bill. The Chinese Embassy in
Washington said China “firmly opposed” it, calling it reminiscent of a “Cold War
mentality.”
Many US lawmakers had said they normally would not support hefty subsidies for
private businesses but noted that China and the EU had been awarding billions in
incentives to their chip companies. They also cited national security risks and
huge global supply chain problems that have hampered global manufacturing.