The U.S Is Investing $280 Billion In Modern Technology To Keep Up With Manufacturing In China

US President Joe Biden has signed a USD 280 billion bipartisan bill to stimulate local high-tech manufacturing as part of his administration’s drive to increase US competitiveness against China.

The $280 billion CHIPS and Science Act, enacted on August 9, intends to boost research and innovation in the industry while also pushing US corporations to invest in chip manufacturing onshore.

According to a US-based semiconductor industry association, the global percentage of chips produced in the United States has dropped from 37 percent in 1990 to 12 percent as production has shifted to nations such as Taiwan and South Korea.

In addition, in recent years, the Chinese government has invested significantly in its semiconductor producers.

The CHIPS legislation, passed by bipartisan majorities in the House and Senate, provides $52.7 billion over five years for US semiconductor research, development, production, and workforce development. Most of the money, $39 billion, will go toward manufacturing incentives.

Manufacturers of semiconductors and associated equipment would also get a 25% government subsidy for capital expenditures in establishing new facilities. According to Intel, this will save nearly $3 billion off the roughly $10 billion cost of a new chip production plant.

According to the US government, the Act has prompted corporations to announce investments totalling more than $44 billion in new production. This sum includes $40 billion from Micron Technology, Inc. in Boise, Idaho, for memory chip production.

“[The act] will strengthen American manufacturing, supply chains, and national security, and invest in research and development, science and technology, and the workforce of the future to keep the United States the leader in the industries of tomorrow, including nanotechnology, clean energy, quantum computing and artificial intelligence,” the Biden administration announced.

However, the Act is more than just chips. It provides substantial incentives for R&D. It will create a “technology, innovation, and partnerships directorate” within the National Science Foundation, focusing on sophisticated technologies from computers and communications to quantum information and biotechnology.

In addition, the Act will also increase basic and developmental research at the Department of Energy’s Office of Science and the National Institute of Standards and Technology to ” maintain US leadership in the sciences and engineering as the engine for American innovation.”

Furthermore, the Act specialises inequality of opportunity among regions and individuals of the US labour force. It allows $10 billion in investment in regional centres around the country to bring together state and local governments, universities and colleges, local unions, companies, and community organisations.

To increase the variety of possibilities, the Act includes investments in universities that serve people of minority groups, primarily through the National Science Foundation.

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