Why the CHIPS Act exists and what it could mean for the United States

What a $280 billion bill signed by President Biden this week could mean for Americans.

VideoCreditCredit...By Brendan Conroy

​​The United States has authorized $280 billion of taxpayers' money to subsidize wealthy computer chip companies and invest in technological research to maintain the strength and innovation of the America.

President Biden on Tuesday signed the law, officially known as the CHIPS and Science Act of 2022, calling it "an investment in America itself ".

If this e law does what its many government supporters and private industry hope the United States will have more control over essential computer chips and have cover if China grows more hostile toward Taiwan, an ally of the U.S. United States. The law also aims to keep America on the cutting edge of technology by providing more government support for research.

Here's why the law exists and what it does could and could not , made to help America:

The dream of chips made in the USA:

The law authorizes more than $52 billion to help companies pay for building or expanding U.S. computer chip factories and for researching and training workers. In short, American taxpayers are paying computer chip companies to manufacture their products here and not, say, in Germany or South Korea.

Why? US officials fear that a relatively small percentage of the world's computer chips are made in the United States, and that they include virtually none of the most sophisticated chips used in military equipment and smartphones.

The first concern is not necessarily valid. Many computer chips are basic, like those used for computer memory or the brains of household appliances, and the United States probably doesn't need to make more of them. Many consumer goods like T-shirts and televisions are outsourced to other countries.

But for two main reasons, proponents of the law say the United States should use government money to make it financially profitable for American and foreign companies to manufacture more computer chips in the United States. advanced computer chips. We don't have the same national interest in maintaining the T-shirt know-how. It costs a ton to build computer chip factories, and it's more expensive in the United States compared to other countries, partly because of subsidies from other governments. This new law will allow the United States to help level the playing field.

The second reason is the potential vulnerability of Taiwan, home to Taiwan Semiconductor Manufacturing Company, which manufactures chips to order for many companies, including Apple. If you have a smartphone or shop online, chips made by T.S.M.C. are probably involved. If China continues to escalate its military clashes with Taiwan, the supply of most of the world's advanced computer chips could be at risk.

Supporting production a bit more chips in the United States. probably won't do much harm to the grip of T.S.M.C. on the most advanced chips. America's small market share in advanced computer chip manufacturing is partly...