(Newswire.net — March 20, 2023) —
In 2022, President Joe Biden signed the CHIPS and Science Act into law. The bipartisan CHIPS and Science Act’s main goal was strengthening American manufacturing. It also aimed to improve research and development, supply chains, and nanotechnology. Biden promised to send $52.7 billion to processor manufacturers over the next five years after the Act became law. A total of $39 billion has been set aside specifically for semiconductor manufacturing incentives. This was done to assist the United States in regaining leadership in the semiconductor industry.
The United States lost the chip market to Korean and Taiwanese firms. It is also due to fierce competition from increasingly capable Chinese firms. Samsung Electronics in South Korea and Taiwan Semiconductor Manufacturing Co. in Taiwan expanded significantly. And this was at a time when Intel, a Silicon Valley firm, struggled to maintain its dominance in the chip-making market. The statistics below demonstrate how far the United States has fallen behind its competitors in the semiconductor industry!
The United States semiconductor industry has been on a downward trajectory!
The CHIPS law was enacted after a chip shortage revealed how much the U.S. military and industries rely on processors manufactured overseas. The Act hoped to reverse this trend. It also hopes to fully support the semiconductor industry, which is critical to weapons systems, laptops, electric vehicles, laptops, etc. Building new chip fabrication facilities, known as fabs, normally costs billions of dollars. According to the Semiconductor Industry Association, U.S. fabs produced 37% of processors in 1990, which has since fallen to 12%.
The legislation served as a shot in the arm of the semiconductor industry!
The CHIPS and Science Act would assist the United States in bringing semiconductors back to the country. After all, “America invented the semiconductor,” as Biden stated. Companies announced new investments in the industry due to the Chips Act becoming law. Check out these investments below!
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In 2022, GlobalFoundries and Qualcomm announced a new partnership worth $4.2 billion to manufacture chips. This was in line with an expansion of GlobalFoundries’ New York facility. Qualcomm, the leading fabless semiconductor company, announced plans to increase semiconductor production in the U.S. It hoped to increase output by up to 50% in the next five years.
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Micron announced a massive $40 billion investment in the production of memory chips. Chip production is critical to the production of electronic devices and computers. As a result, up to 40,000 new construction and manufacturing jobs will be created. Over the next decade, this investment will increase the United States market share in memory chip production from less than 2% to up to 10%.
What has the U.S. administration done to ensure CHIPS law’s goals are realized?
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There were several recommendations from the President’s Council of Advisors on Science and Technology, i.e., PCAST., regarding semiconductor research and development.
PCAST wrote the President a letter outlining their suggestions for implementing the CHIPS law. Here are a few of their suggestions!
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Creating a national microelectronics training network for community college-based semiconductor workforce development.
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Establishing a national semiconductor research agenda that includes fundamental research challenges.
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Increasing innovation by lowering the barriers to entry for new businesses. It proposed the creation of a “chiplet platform” to enable startups to innovate cheaply and faster.
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High-tech manufacturing permits were coordinated.
The White House announced the formation of a sector-specific interagency expert working group. The group would concentrate on high-tech manufacturing project delivery issues. This would be per the President’s Permitting Action Plan, which was announced in May 2022.
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Provide more STEM opportunities to more Americans.
STEM workplace development and education are critical. These will be necessary for highly skilled jobs in emerging industries e.g., semiconductor industry. The CHIPS and Science Act authorized increased and new STEM education and training investments. Semiconductor manufacturers, for example, will train their employees to use the Six Sigma DMAIC methodology. This methodology will assist local manufacturers in lowering costs to compete with international manufacturers.
Final Thoughts
CHIPS law will improve American semiconductor research, development, and production operations. It will ensure the U.S. regains leadership in this super-important technology. Semiconductors are essential in automobiles, household appliances, defense systems, etc. The ripple effect of passing the CHIPS law is unlocking more semiconductor investments in the future!