FACTSHEET: CHIPS and the Science Act Will Cut Costs, Create Jobs, Strengthen Supply Chains, and Stand Up to China

In President Biden’s first year in office, the Biden-Harris administration implemented an industrial strategy to revive domestic manufacturing, create good-paying U.S. jobs, strengthen American supply chains, and accelerate the development of industries of the future. These policies have fueled a historic recovery in manufacturing, adding 642,000 jobs from 2021. Companies are reinvesting in America, bringing good-paying jobs back home. Compared to last year, the construction of new production facilities increased by 116 percent.

Today, President Biden will sign the bipartisan CHIPS and Science Act of 2022, which will build on this progress by making historic investments that will help America’s workers, communities and businesses win the race for 21St century. It will strengthen American manufacturing, supply chains, and national security, and invest in research and development, science and technology, and the workforce of the future to keep the United States a leader in tomorrow’s industries, including nanotechnology, clean energy, and quantum energy. computing and artificial intelligence. The CHIPs and Science Act makes smart investments so Americans can compete and win the future.

Spurred by the passage of the CHIPS and Science Act of 2022, companies this week announced nearly $50 billion in additional investment in U.S. semiconductor manufacturing, bringing total business investment to nearly $150 billion since President Biden took office:

  • Micron announces a 40 billion dollars investment in the production of memory chips critical to computers and electronic devices, which will create up to 40,000 new jobs in construction and manufacturing. This investment alone will increase the share of US memory chip production from less than 2 percent to 10 percent over the next decade.
  • Qualcomm and GlobalFoundries announce a new partnership that includes 4.2 billion dollars for chip production at GlobalFoundries’ expansion in upstate New York. Qualcomm, the world’s leading semiconductor company, has announced plans to increase its US semiconductor production by 50 percent over the next five years.

The CHIPS and Science Act will promote American semiconductor research, development, and manufacturing, ensuring U.S. leadership in the technology that underpins everything from automobiles to home 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, we rely on East Asia for 75 percent of the world’s production. The CHIPS and Science Act would unlock hundreds of billions more for private sector investment in semiconductors across the country, including manufacturing needed for national defense and critical sectors.

The Act will also ensure that the United States maintains and develops its scientific and technological superiority. In the mid-1960s, at the height of the moon race, the federal government invested 2 percent of GDP in research and development. By 2020, that number had dropped to less than 1 percent. Economic growth and prosperity over the past 40 years has concentrated in a few regions on the coast, leaving too many communities behind. The CHIPS and Science Act will ensure that the future is built ALL across America and unlock opportunities in science and technology for those historically left out.

The Biden-Harris administration has already taken steps to ensure the swift and responsible implementation of CHIPS and funding for the Science Act:

  • Agreed permission for high-tech production. Today, the Administration announces the launch of an interdepartmental expert working group on obtaining permits and related issues of implementing projects in high-tech manufacturing in accordance with the President’s Action Plan on obtaining permits announced in May. This interagency task force will build on the interagency CHIPS and Science Act currently being planned between the Council on Environmental Quality, the Environmental Protection Agency, and the Department of Commerce. This will help ensure cooperation and coordination among federal agencies, the private sector, and state and local governments to facilitate timely and effective review of all federally funded projects. The task force will also serve as a clearinghouse for best practices on permitting and other project implementation issues to support the implementation of projects funded under the bill.
  • The President’s Advisory Council on Science and Technology (PCAST) issues new guidelines for semiconductor research and development. PCAST ​​today sent a letter to the President with its recommendations for implementing the CHIPS and Science Act, including: forming a national microelectronics training network to develop the semiconductor workforce at academic institutions, including minority-serving institutions and community colleges; promoting innovation by reducing entry barriers for startups; recommend the development of a “chip platform” to allow startups and researchers to innovate faster and at lower costs; and setting a national semiconductor research agenda with fundamental research and grand challenges to, for example, build the first “zeta-scale supercomputer” that will be 1,000 times faster than the fastest supercomputer available today. The full PCAST ​​semiconductors report will be published this fall.

CHIPS Act and Science:

  • Strengthen US leadership in semiconductors. The CHIPS and Science Act provides 52.7 billion dollars for America’s semiconductor research, development, manufacturing and workforce development. This includes 39 billion dollars in stimulating production, including 2 billion dollars for outdated microcircuits used in cars and security systems, 13.2 billion dollars in research and development and workforce development, as well as 500 USD million ensure the security of international information communication technologies and semiconductor supply chain operations. It also provides a 25 percent investment tax credit for capital expenditures on semiconductor manufacturing and related equipment. These incentives will ensure domestic supply, create tens of thousands of high-paying union construction jobs and thousands more high-skilled industrial jobs, and stimulate hundreds of billions more in private investment.

The bill requires recipients to demonstrate significant investment in workers and the community, including opportunities for small businesses and disadvantaged communities, providing semiconductor incentives that support equitable economic growth and development.

The funds also come with strong hedges that ensure recipients don’t build certain facilities in China and other countries that raise concerns, and prevent companies from using taxpayer funds to buy back shares and pay shareholders dividends. It would also support high-paying union construction jobs by demanding prevailing Davis-Bacon wage rates for facilities built with CHIPS funds.

  • Foster US innovation in wireless supply chains. The CHIPS and Science Act includes 1.5 billion dollars to promote and deploy wireless technologies that use open and interoperable radio access networks. These investments will enhance US leadership in wireless technologies and their supply chains.
  • Previous world leadership of the United States in the technologies of the future. America’s leadership in emerging technologies—from artificial intelligence to biotechnology and computing—is critical to both our future economic competitiveness and our national security. Public investment in research and development lays the foundation for future breakthroughs that will eventually create new businesses, new jobs and increased exports.

The CHIPS and Science Act would create a Directorate for Technology, Innovation, and Partnerships at the National Science Foundation (NSF) to focus on areas such as semiconductors and advanced computing, advanced communications, advanced energy, quantum information, and biotechnology. This will enhance the commercialization of research and technology, ensuring that what is invented in America is made in America. The Act also reauthorizes and expands basic and targeted research at the Department of Energy’s Office of Science and the National Institute of Standards and Technology to support U.S. leadership in science and engineering as the engine of American innovation.

  • Catalyze regional economic growth and development. The CHIPS and Science Act allows $10 billion to be invested in regional innovation and technology hubs across the country, bringing together state and local governments, higher education institutions, unions, businesses and community organizations to create regional partnerships for technology development, innovation and production sectors.

    These centers will create jobs, spur regional economic development and position communities across the country to become leaders in high-wage, high-growth sectors such as artificial intelligence, advanced manufacturing and clean energy technologies. It also authorizes a $1 billion RECOMPETE pilot program at the U.S. Department of Commerce’s Economic Development Administration (EDA) to alleviate persistent economic hardship and support long-term, integrated economic development and job creation in the hardest-hit communities.

  • Provide STEM opportunities for more Americans to enter high-paying, skilled jobs. Science, technology, engineering, and mathematics (STEM) education and workforce development are critical to developing the skills needed for high-skilled jobs in emerging industries built on the technologies of the future. To ensure more people from all backgrounds and from all regions and communities across the country, especially people from marginalized, underserved, and under-resourced communities, can benefit from and participate in STEM education and training, the CHIPS and Science Act allows new and increased investment in STEM education and training from K-12 to community college, undergraduate and graduate.
  • Create opportunity and equity for all of America in STEM and innovation. The legislation authorizes investments to expand the geographic and institutional diversity of research institutions and the students and researchers they serve, including new initiatives to support historically black colleges and universities (HBCUs) and other minority-serving institutions, as well as other academic institutions that provide opportunities historically underserved students and communities, primarily through the National Science Foundation (NSF). The CHIPS and Science Act also expands the geographic diversity of research and innovation funding to attract talent and ideas across America. The legislation also gives agencies and institutions tasks and tools to combat sexual and gender-based harassment in science, a clear barrier to participation in STEM for many Americans. Through these investments and initiatives, the bill will support students, faculty, and researchers at minority-serving and emerging research institutions, as well as in rural communities, and expand the participation of people of diverse backgrounds and experiences, helping to build the STEM ecosystem. it looks that way and benefits all of America.

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