HomeIndustriesU.S. to Provide Subsidies to Fund Domestic Chip Production

U.S. to Provide Subsidies to Fund Domestic Chip Production

U.S. President Joe Biden is set to sign a bill on Tuesday to authorize $52.7 billion in subsidies to strengthen U.S. semiconductor development. In an effort to compete with China in the semiconductor industry, the U.S. is looking to boost both research and production efforts. The exact rules that the U.S. Commerce Department will set regarding the review of grant awards remain to be disclosed.

Set to commence at 10 a.m. EDT, Tuesday’s signing will be attended by the auto industry and union leaders, including United Auto Workers President Ray Curry and the chief executives of HP, Intel, Lockheed Martin, and Advanced Micro Devices.

According to White House officials, the bill’s passage is spurring an array of new chip investments. These include Qualcomm’s purchase of $4.2 billion in semiconductor chips from GlobalFoundries’s New York factory and Micron’s $40 billion investment in chip manufacturing, a move that will boost U.S. market share from 2% to 10%.

In addition to advancing the United States’ competitiveness in the chip industry, this bill also aims to help the nation overcome the ongoing global chip shortage. Currently, thousands of American-made vehicles are awaiting the installation of chips, without which production cannot be wrapped up and they cannot be sold.

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