President Joe Biden signed multibillion-dollar legislation on Tuesday that would boost domestic semiconductor and other high-tech manufacturing sectors that US leaders fear could be dominated by rival China.
The Chips and Science Act includes around $52 billion to encourage the production of microchips, the tiny but powerful and relatively difficult-to-manufacture components that are at the heart of nearly all modern machines.
Another ten billion dollars will be allocated for scientific research and development.
The White House says the government’s commitment to boosting the high-tech industry is already attracting large private investors, with around $50 billion in new semiconductor investment alone. The lion’s share of that is a plan announced by US firm Micron to pour $40 billion into domestic expansion by 2030.
Biden said in a White House speech that the Chip Act cash injection will help “win economic competition in the 21st century.”
Entrepreneurs are “the reason I’m so optimistic about the future of our country,” he said, and “the Chips and Science Act reinforces our efforts to make semiconductors here in America.”
One of the Democrat’s key issues since taking office has been the need to renew US leadership on cutting-edge innovation and rebuild the domestic industrial base in the face of China’s state-backed mammoth investments.
Semiconductors are of particular importance as they are vital to everything from washing machines to sophisticated weapons, and almost all are made abroad.
Although the semiconductor was invented in the United States, the country produces only around 10 percent of the world’s supply, according to the White House, with about 75 percent of U.S. supplies coming from East Asia.
Biden is also counting on the Chips Act to generate enthusiasm among voters as his Democratic Party seeks to defend a thin congressional majority against a Republican takeover in November’s midterm elections.
He told Americans that studies show that expanding factories will create around a million construction jobs over the next six years – and those will be “union jobs” that pay “the prevailing wage”.
On Wednesday, Biden will sign another law that will increase funding for military veterans exposed to toxins. Like the chips bill, this won bipartisan support in the normally bitterly divided Congress.
Biden is also expected to sign a massive domestic investment bill shortly — backed only by Democrats — aimed at tackling climate change and reducing healthcare costs.
In light of the winning streak in Congress and the sudden momentum for his long-stalled agenda, Biden predicted that “people will look back on this week and everything that we’ve happened and everything that we’ve brought forward, that we’ve moved forward.” at this turning point in history.”
“We bet on ourselves, believed in ourselves and reclaimed the history, spirit and soul of this nation,” he said.
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