U.S. President Joe Biden signed a landmark bill on Tuesday to provide $52.7 billion (roughly Rs. 4,19,400 crore) in subsidies for U.S. semiconductor manufacturing and research and step up efforts to make the U.S. competitive compared to China’s in the field. science and technology.
“The future will be created in America,” Biden said, calling the measure “a once-in-a-generation investment in America itself.”
Biden has touted investments made by chip companies, although it remains unclear when the US Department of Commerce will write rules for reviewing awarded grants and how long it will take to guarantee projects.
Some Republicans joined Biden on the White House lawn to attend the signing of the potato chip bill, which has been in Congress for years.
The signing was attended by executives from Micron, Intel, Lockheed Martin, HP, and Advanced Micro Devices, as well as the governors of Pennsylvania and Illinois, the mayors of Detroit, Cleveland, and Salt Lake City, and lawmakers.
The White House said the passage of the bill encourages investment in new chips. He noted that Qualcomm on Monday agreed to buy an additional $4.2 billion (roughly Rs. 33,400 crore) of semiconductor chips from New York-based GlobalFoundries, bringing its commitment to $7.4 billion (roughly Rs. 58,900 crore) in purchases to 2028.
The White House also touted Micron, announcing a $40 billion (roughly Rs. 3,18,300 crores) investment in memory chip manufacturing, which would boost US market share from 2 percent to 10 percent. chips bill.
Progressives have argued that the bill is a giveaway to lucrative chip companies that have previously closed factories in the US, but Biden said on Tuesday that “this bill does not give checks to companies.”
The law aims to address a persistent shortage that has affected everything from cars, guns, washing machines to video games. Thousands of cars and trucks remain parked in southeast Michigan waiting for chips as shortages continue to hit automakers.
A rare major move in US industrial policy, the bill also includes a 25 percent investment tax credit for chip factories valued at $24 billion (roughly Rs. 1,91,000 crore).
The legislation provides for $200 billion (roughly Rs. 15,91,700 crores) over 10 years to stimulate scientific research in the US to better compete with China. Congress will still need to pass a separate appropriation law to fund these investments.
China has lobbied for a semiconductor bill. The Chinese embassy in Washington said China was “categorically opposed”, calling it reminiscent of “Cold War mentality”.
Biden noted that the US needs chips for key weapons systems such as Javelin missiles. “It is not surprising that the Chinese Communist Party actively lobbied American businesses against this bill,” Biden said.
Many US lawmakers have said they would not normally support large subsidies for private businesses, but noted that China and the European Union are providing billions of dollars in incentives to their chipmakers. They also cited national security risks and huge global supply chain issues that are hampering global production.
© Thomson Reuters 2022