CHIPS and Science Act
Great Seal of the United States
Long titleCreating Helpful Incentives to Produce Semiconductors for America Act
NicknamesCHIPS-Plus
Enacted bythe 117th United States Congress
EffectiveAugust 9, 2022
Citations
Public lawPub. L.Tooltip Public Law (United States) 117–167 (text) (PDF)
Legislative history
  • Introduced in the House of Representatives as H.R. 4346 the Supreme Court Security Funding Act of 2022 by Tim Ryan (D–OH) on July 1, 2021
  • Committee consideration by House Appropriations
  • Passed the House on July 28, 2021 (215–207)
  • Passed the Senate as the Chips and Science Act on July 27, 2022 (64–33) with amendment
  • House agreed to Senate amendment on July 28, 2022 (243–187–1)
  • Signed into law by President Joe Biden on August 9, 2022

The CHIPS and Science Act (or Creating Helpful Incentives to Produce Semiconductors for America Act), also known as simply the CHIPS Act, is a U.S. federal statute enacted by the 117th United States Congress and signed into law by President Joe Biden on August 9, 2022. The act provides billions of dollars in new funding to boost domestic research and manufacturing of semiconductors in the United States.[1]

It channeled more than $52 billion into researching semiconductors and other scientific research, with the primary aim of countering China. The bill passed the Senate by a vote of 64–33 on July 27, 2022.[2] On July 28, the $280 billion bill passed the House by a vote of 243–187–1.[3][4]

Background and provisions

The bill was considered amidst a global semiconductor shortage and intended to provide subsidies and tax credits to chip makers with operations in the United States. The Department of Commerce was granted the power to allocate funds based on companies' willingness to sustain research, build facilities, and train new workers.[5] The CHIPS Act includes $39 billion in tax benefits and other incentives to encourage American companies to build new chip manufacturing plants in the US.[6] Companies are subjected to a ten-year ban prohibiting them from producing chips above 28-nanometers in China and Russia if they are awarded subsidies under the act.[7]

Passage

Every senator which caucuses with the Democratic Party except for Bernie Sanders voted in favor of passing the CHIPS Act, and they were joined by seventeen Republican senators, which included senate Republican leader Mitch McConnell, Utah senator Mitt Romney, and South Carolina senator Lindsey Graham.[2]

Reactions

Many legislators and elected officials from across both the federal government and various state governments endorsed the passage. A bipartisan group of governors consisting of Pennsylvania's Tom Wolf, Alabama's Kay Ivey, California's Gavin Newsom, Kentucky's Andy Beshear, Michigan's Gretchen Whitmer, Wisconsin's Tony Evers, Illinois' J. B. Pritzker, Kansas' Laura Kelly, and North Carolina's Roy Cooper pushed for the passage of the bill back in November of 2021.[8][9] Separately, Ohio governor Mike DeWine, whose state became the home of Intel's newest semiconductor fabrication plant in the Columbus-suburb of New Albany, as well as Texas governor Greg Abbott and Texas senator John Cornyn, whose state was the home of a major investment from Samsung, each pushed for the bill to be passed and applauded at its advancement through Congress.[10][11][12]

The bill was criticized by Republican house leader Kevin McCarthy and senator Bernie Sanders as a "blank check", which the latter equated to a bribe to semiconductor companies.[2][3] It has received widespread support from chip firms, though they were concerned about the provision banning them from further investments in China.[13][14]

China lobbied against the bill and criticized it as being "reminiscent of a 'Cold War mentality'".[15]

See also

References

  1. ^ Johnson, Lamar (August 9, 2022). "Biden ends slog on semiconductor bill with signature". POLITICO. Retrieved August 9, 2022.
  2. ^ a b c Sprunt, Barbara (July 27, 2022). "Legislation to subsidize U.S.-made semiconductor chips heads to Biden's desk". NPR. Retrieved August 6, 2022.
  3. ^ a b Kelly, Makena (July 28, 2022). "CHIPS Act clears Congress, ensuring $52 billion boost to US foundries". The Verge. Retrieved August 5, 2022.
  4. ^ Breuninger, Kevin (August 2, 2022). "Biden to sign bill boosting China competition and U.S. chip production". CNBC. Retrieved August 5, 2022.
  5. ^ Swanson, Ana (August 3, 2022). "Congress Is Giving Billions to the Chip Industry. Strings Are Attached". The New York Times. Retrieved August 5, 2022.
  6. ^ "What's in the recently passed CHIPS Act?". USAFacts. Retrieved August 15, 2022.
  7. ^ Debby Wu; Daniel Flatley; Jenny Leonard (August 2, 2022). "US to Stop TSMC, Intel From Adding Advanced Chip Fabs in China". Bloomberg. Retrieved August 13, 2022.
  8. ^ "Governor Wolf, Bipartisan Governors Urge Congress to Pass CHIPS Act to Create American Jobs, Boost Semiconductor Production". Governor Tom Wolf. November 10, 2021. Retrieved August 11, 2022.
  9. ^ "Governors urge passage of CHIPS Act funding to spur semiconductor 're-shoring' | InsideTrade.com". insidetrade.com. Retrieved August 11, 2022.
  10. ^ "Congress passes CHIPS Act, paving way for microchip plant in Ohio". WEWS. July 28, 2022. Retrieved August 11, 2022.
  11. ^ BeMiller, Haley. "Intel CEO: Company moving 'full speed ahead' on Ohio plans after CHIPS Act passes Congress". The Columbus Dispatch. Retrieved August 11, 2022.
  12. ^ Moneyhon, Carl H. (2000). Coke, Richard (1829-1897), governor of Texas and U.S. senator. American National Biography Online. Oxford University Press.
  13. ^ Nellis, Stephen (July 20, 2022). "Chip designers warm to U.S. bill despite big benefits to Intel". Reuters. Retrieved August 5, 2022.
  14. ^ Cheng Ting-Fang; Lauly Li; Yifan Yu (August 2, 2022). "CHIPS Act leaves chipmakers facing choice between U.S. and China". NIKKEI Asia. Retrieved August 5, 2022.
  15. ^ O'Meara, Sean (July 29, 2022). "China Says US Chip Act Will Harm Supply Chain, Global Trade". Asia Financial. Retrieved August 9, 2022.
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