Will the CHIPS Act Reinstate Employment in the Tech Industry and Semiconductor Manufacturing?

The US government is working to resurrect chip manufacturing on American soil, and Micron Technology is just the latest of a dozen corporations to announce new semiconductor fabrication facilities in the US.

FREMONT, CA: Thirty-seven per cent of the world's chip supply was produced in the US, the country where semiconductors were first created. However, around 12 per cent of all computer chips are currently made in the United States.

The global supply chain crisis exposed the decline in domestic chip manufacture, which prompted calls to restore microprocessor production in the US. Companies including Intel (INTC: NASDAQ), Samsung, and TSMC have disclosed plans for a rush of new US fabrication plants, encouraged by the federal government. Qualcomm (QCOM: NASDAQ) and GlobalFoundries also announced it would spend USD 4.2 billion to increase chip production at its fabrication plant in Malta, New York.

Micron Technology, a chip manufacturer, just last week said it would invest USD 20 billion to create the biggest US semiconductor facility ever and could spend up to USD 100 billion over the next 20 years to expand it. The CHIPS and Science Act of 2022, which President Joe Biden signed into law in August, was acknowledged, at least in part, by the semiconductor manufacturers when they announced plans for additional fabrication facilities. The law allocates USD 52.7 billion for manufacturing subsidies to increase US semiconductor manufacturing. Beginning the following year, chip producers can start searching for tax advantages and funding to defray building and other costs.

The CHIPS Act is essentially an effort to close the cost gap with nations like Taiwan, South Korea, and China in order to boost the proportion of microprocessors produced in the US. Governments in certain countries currently provide subsidies to semiconductor producers.

Additionally, the US legislation aims to create high-tech jobs and loosen foreign chip manufacturers' supply-chain control over US original equipment manufacturers. According to Senate Majority Leader Chuck Schumer (D-NY), the basic line is that Micron would have decided to build its mega-fab elsewhere without the CHIPS and Science legislation.

Leading manufacturers would not benefit significantly from the money, tax advantages, and other incentives provided by the CHIPS Act. The top chipmakers, including TSMC, Samsung, and Intel, spend that much money each year. The incentives show that the US government is committed to assisting the sector. Gupta asserted that more is required and called for a CHIPS Act 2.0, 3.0, and beyond.