US CHIPS and Science Act Provides >$50 Billion to Strengthen Domestic Manufacturing, Supply Chains, and National Security

By Chantal Polsonetti

Company and Product News

US President Joseph Biden signed into law the CHIPS and Science Act of 2022, a law intended to strengthen American manufacturing, supply chains, and national security, as well as boost investment in research and development, science and strengthen American manufacturingtechnology, and the workforce of the future.  The law was passed with the intent of establishing the United States as the leader in the industries of tomorrow, including nanotechnology, clean energy, quantum computing, and artificial intelligence. 

The CHIPS and Science Act is intended to boost American semiconductor research, development, and production for everything from automobiles to household appliances to defense systems. America invented the semiconductor, but today produces about 10 percent of the world’s supply—and none of the most advanced chips. Instead, East Asia currently accounts for 75 percent of global production. The CHIPS and Science Act is further intended to unlock hundreds of billions more in private sector semiconductor investment across the country, including production essential to national defense and critical sectors.

Bolster US Leadership in Semiconductors

The CHIPS and Science Act provides $52.7 billion for American semiconductor research, development, manufacturing, and workforce development. This includes $39 billion in manufacturing incentives, including $2 billion for the legacy chips used in automobiles and defense systems, $13.2 billion in R&D and workforce development, and $500 million to provide for international information communications technology security and semiconductor supply chain activities. It also provides a 25 percent investment tax credit for capital expenses for manufacturing of semiconductors and related equipment. These incentives are intended to secure domestic supply, create tens of thousands of good-paying, union construction jobs and thousands more high-skilled manufacturing jobs, plus catalyze hundreds of billions more in private investment.

The bill requires recipients to demonstrate significant worker and community investments, including opportunities for small businesses and disadvantaged communities, ensuring semiconductor incentives support equitable economic growth and development.  These funds also come with strong guardrails, ensuring that recipients do not build certain facilities in China and other countries of concern, and preventing companies from using taxpayer funds for stock buybacks and shareholder dividends.

Promote U.S. innovation in wireless supply chains

The CHIPS and Science Act includes $1.5 billion for promoting and deploying wireless technologies that use open and interoperable radio access networks.

Advance U.S. global leadership in the technologies of the future

U.S. leadership in new technologies—from artificial intelligence to biotechnology to computing—is viewed as critical to both future economic competitiveness and national security. The CHIPS and Science Act will establish a technology, innovation, and partnerships directorate at the National Science Foundation (NSF) to focus on fields like semiconductors and advanced computing, advanced communications technology, advanced energy technologies, quantum information technologies, and biotechnology. It will strengthen commercialization of research and technology, ensuring that what is invented in America is made in America. The Act will also reauthorize and expand fundamental and use-inspired research at the Department of Energy Office of Science and the National Institute of Standards and Technology to sustain U.S. leadership in the sciences and engineering as the engine for American innovation.

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