Biden signs $52.7 billion microchip investment bill to ‘counter China’

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The chip shortage in the United States has cost its economy and led to shortages… and a lag in its “power” competition with China.

  • U.S. President Joe Biden signs the CHIPS and Science Act of 2022 alongside Vice President Kamala Harris and Speaker of the House of Representatives Nancy Pelosi at the White House, Washington, August 9, 2022. (Reuters)

US President Joe Biden on Tuesday signed a landmark bill – the CHIPS and Science Act of 2022 – that will allocate $52.7 billion to subsidize semiconductor production and research in a bid to strengthen incentives to make the United States more competitive against 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.”

Republicans, along with Democrats, joined Biden on the White House lawn when the US president signed the chip bill that was distilled years in Congress before being approved.

Attending the signing were the CEOs of Micron, Intel, Lockheed Martin, HP and Advanced Micro Devices. In addition, the governors of Pennsylvania and Illinois, in addition to the mayors of Detroit, Cleveland and Salt Lake City, and legislators were present at the event.

Read more: Intel invests in EU, fuels chip race with Asia

Passing the White House bill created new chip investments: On Monday, Qualcomm agreed to buy $4.2 billion worth of semiconductor chips from GlobalFoundries’ New York factory, represents a total of $7.4 billion in purchases through 2028.

Micron, according to the White House, has announced a $40 billion investment in memory chip manufacturing, which could boost its market share from 2% to 10%. This investment was planned with “advance subsidies” from the chip bill, according to Biden.

The shortage affects everything from cars, guns and washing machines to video games: Thousands of cars and trucks sit parked in Southeast Michigan waiting for tokens.

The bill also includes a 25% investment tax credit for chip factories, worth about $24 billion.

This legislation will allow $200 billion over a decade to spur technology research that will compete with Beijing – however, Congress will need to pass separate appropriations legislation to fund these investments.

Read next: China’s largest chipmaker increases capacity after record revenue

The Chinese Embassy in Washington said Beijing “strongly opposes” the bill because it smacks of a “Cold War mentality”.

US Needs Chips for Key Weapons, Like Javelin Missiles: “It’s no wonder the Chinese Communist Party actively lobbied American companies against this bill,” Biden said.

Microchip Shortage Causes US Economy to Lose $240 Billion in 2021

Analysts earlier this year said a shortage of microchips in U.S. manufacturing processes cost the U.S. economy $240 billion last year, with electronics companies bearing the biggest impact.

According SCSdisruption was caused by the closure of key chip production sites in Asia due to the outbreak.

Optimal Design company CEO Sajid Patel said SCS that in some cases production had to be cut because the chips weren’t available, adding that “I think it’s important for us to make this product in the United States. We don’t make enough of it now We need to do more And the only way to do that is to have more factories And so that’s the investment, frankly, in the future It’s not that far away.

The scarcity of microchips has also hampered automobile production. Instead of going immediately to the showroom, Ford vehicles were transported to parking lots from the assembly line where they waited for chips.

As a result, Ford lost $210 billion. The shortage is expected to worsen in the near future, but domestic chip manufacturing is expected to increase, with Intel announcing the development of a chip factory in the state of Ohio.

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