Biden Signs $280 Billion CHIPS Act in Bid to Boost U.S. over China

On August 9, 2022, President Biden signed the legislation known as CHIPS Plus. This new legislation was developed to strengthen the domestic chip manufacturing industry and finance scientific research to shore up competitiveness with China.

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The bill’s passage through both chambers marks a significant legislative achievement after more than a year of negotiation.

The new law:

• Allocates $54 billion for chips and public wireless supply chain innovation ($39 billion of this goes towards financial assistance to build and modernize semiconductor facilities in the U.S.)
• Provides $80 billion to the National Science Foundation authorized over five years to support research and innovation
• Establishes 25% tax credit for investment in semiconductor manufacturing
• Includes a $1 billion pilot program for the Commerce Department to provide grants to assist distressed communities to fund economic development activities.

White House officials expect the new legislation to spur the construction of new chip plants in the U.S. soon. The hope is that the building of these plants creates construction jobs and, following this, the new facilities eventually boost the availability of manufacturing jobs.

Source: Valve Manufacturers Association