Biden signs bill to boost US chip investment

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Biden signs bill to boost US chip investment

President Joe Biden signed a landmark bill that will provide $52.7 billion in subsidies for US semiconductor production and research and boost efforts to make the United States more competitive with China's science and technology efforts.

The future is going to be made in America, Biden said, calling the measure a once-in-a-generation investment in America itself. Biden touted the investments that chip companies are making, even though it remains unclear when the US Commerce Department will write rules for reviewing grant awards and how long it takes to underwrite projects.

Some Republicans joined Biden on the White House lawn to attend the signing of the chips bill that was years in the making in Congress.

The CEOs of Micron, Intel, Lockheed Martin, HP and Advanced Micro Devices and lawmakers attended the signing, as did governors of Pennsylvania and Illinois, the mayors of Detroit, Cleveland and Salt Lake City.

The White House said the bill was spurring new chip investments. It was noted that Qualcomm agreed to buy an additional $4.2 billion in semiconductor chips from GlobalFoundries' New York factory, bringing its total commitment to $7.4 billion in purchases through 2028.

The White House also announced a $40 billion investment in memory chip manufacturing, which will boost US market share from 2% to 10%, an investment that it said was planned with anticipated grants from the chips bill.

Progressives argued that the bill is a giveaway to profitable chips companies that previously closed US plants, but Biden argued Tuesday that this law is not handing out blank checks to companies. The legislation aims to address a persistent shortage that has affected everything from cars, weapons, washing machines and video games. Thousands of cars and trucks are parked in southeast Michigan awaiting chips as the shortage continues to affect automakers.

A rare major foray into US industrial policy, the bill also includes a 25% investment tax credit for chip plants, estimated to be worth $24 billion.

The legislation allows scientists to compete with China over the next 10 years, allowing for $200 billion in US scientific research. Congress would still have to pass separate appropriations legislation to fund those investments.

China lobbied against the semiconductor bill. The Chinese Embassy in Washington said China firmly opposed it, calling it reminiscent of a Cold War mentality. Biden said that the United States needs chips for key weapons systems like Javelin missiles. Biden said that the Chinese Communist Party actively lobbied for US business against this bill.

Many US lawmakers said they normally wouldn't support hefty subsidies for private businesses, but noted that China and the European Union have been giving billions of dollars in incentives for their chip companies. They also cited national security risks and huge global supply chain problems that have hampered global manufacturing.

2 billion more chips from GlobalFoundries are sold on chips from GlobalFoundries.