Chipmakers eager to receive huge subsidies stood with President Joe Biden as he signed a bill today injecting $52.7 billion into their industry. Executives from companies like Micron, Intel, HP and Lockheed Martin witnessed Biden's stroke of the pen, alongside auto industry leaders and other stakeholders. They hope the new subsidies will end "an ongoing shortage" of memory chips that Reuters says has affected "everything from cars, guns, washing machines and video games".
In total, the CHIPS and Science Act, also known as the Creating Helpful Incentives to Produce Semiconductors for America Act, authorizes up to $200 billion in subsidies over 10 years, if the United States decides to continue to invest. The long-term vision is to propel the United States ahead of China and other invested countries in a global race to become a leader in the chip industry.
Once the law is signed into law, the Commerce Department will decide the rules for the payment of grants, dictating who will receive how much money and for how long. Since the advanced production of semiconductors needed to manufacture chips requires a significant investment of time and money, venture capitalists have been less likely to fund long-term projects. This act positions the federal government to close this funding gap while advancing the coveted technology nationally.
Some chipmakers have already announced long-term investments before Biden signs the bill into law, including a commitment by Qualcomm to buy $7.4 billion worth of semiconductor chips over the next six months. next few years in a factory in New York. Micron has pledged even more, setting aside $40 billion to fund memory chip manufacturing. Micron's investment alone would "push the U.S. market share from 2% to 10%," a significant recovery that is still relatively modest compared to the 38% market share enjoyed by the United States. United in 1990.
In addition to federal subsidies, chipmakers are eligible for a 25% investment tax credit through the bill. For the sector as a whole, this is another windfall estimated at $24 billion, on top of the $50 billion in subsidies.
Historically, U.S. lawmakers have considered corporate subsidies of such proportions to be counter-intuitive to ensuring a free and fair market. But lawmakers seem to think it's necessary to stave off national security risks and address global supply chain concerns by investing billions in American chip production, much like how the European Union and China have invested in their own production.
This could help the US become one of the world's leading chipmakers, but there are signs that the US will need to watch progress closely to ensure maximum return on its investment. Biden's decision today comes just after China's chip manufacturing industry 'fell into chaos', with top Chinese chip industry officials arrested on bribery charges for abusing the government money. After investing $30 billion, China still has to pay another $20 billion as investigations begin, and its technology still lags behind Taiwan's.
Experts said it was no wonder to find corruption in an industry where so much money was 'wasting'. In the United States, corruption resulting from increased corporate welfare has been heavily criticized since the 1980s, when watchdogs first attempted to "drain the swamp" of politically motivated and financially motivated corporations. controlling powers working against the interests of consumers for profit. China is an example...
Chipmakers eager to receive huge subsidies stood with President Joe Biden as he signed a bill today injecting $52.7 billion into their industry. Executives from companies like Micron, Intel, HP and Lockheed Martin witnessed Biden's stroke of the pen, alongside auto industry leaders and other stakeholders. They hope the new subsidies will end "an ongoing shortage" of memory chips that Reuters says has affected "everything from cars, guns, washing machines and video games".
In total, the CHIPS and Science Act, also known as the Creating Helpful Incentives to Produce Semiconductors for America Act, authorizes up to $200 billion in subsidies over 10 years, if the United States decides to continue to invest. The long-term vision is to propel the United States ahead of China and other invested countries in a global race to become a leader in the chip industry.
Once the law is signed into law, the Commerce Department will decide the rules for the payment of grants, dictating who will receive how much money and for how long. Since the advanced production of semiconductors needed to manufacture chips requires a significant investment of time and money, venture capitalists have been less likely to fund long-term projects. This act positions the federal government to close this funding gap while advancing the coveted technology nationally.
Some chipmakers have already announced long-term investments before Biden signs the bill into law, including a commitment by Qualcomm to buy $7.4 billion worth of semiconductor chips over the next six months. next few years in a factory in New York. Micron has pledged even more, setting aside $40 billion to fund memory chip manufacturing. Micron's investment alone would "push the U.S. market share from 2% to 10%," a significant recovery that is still relatively modest compared to the 38% market share enjoyed by the United States. United in 1990.
In addition to federal subsidies, chipmakers are eligible for a 25% investment tax credit through the bill. For the sector as a whole, this is another windfall estimated at $24 billion, on top of the $50 billion in subsidies.
Historically, U.S. lawmakers have considered corporate subsidies of such proportions to be counter-intuitive to ensuring a free and fair market. But lawmakers seem to think it's necessary to stave off national security risks and address global supply chain concerns by investing billions in American chip production, much like how the European Union and China have invested in their own production.
This could help the US become one of the world's leading chipmakers, but there are signs that the US will need to watch progress closely to ensure maximum return on its investment. Biden's decision today comes just after China's chip manufacturing industry 'fell into chaos', with top Chinese chip industry officials arrested on bribery charges for abusing the government money. After investing $30 billion, China still has to pay another $20 billion as investigations begin, and its technology still lags behind Taiwan's.
Experts said it was no wonder to find corruption in an industry where so much money was 'wasting'. In the United States, corruption resulting from increased corporate welfare has been heavily criticized since the 1980s, when watchdogs first attempted to "drain the swamp" of politically motivated and financially motivated corporations. controlling powers working against the interests of consumers for profit. China is an example...
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Chip Somodevilla / Staff | Getty ImagesNews
