The continuous scarcity that has impacted everything from vehicles, guns, washing machines, and video games is being addressed by the law.
The White House said on Wednesday that President Joe Biden will sign legislation next Tuesday to support the American semiconductor sector and forward initiatives to make the US more competitive with China.
A continuous scarcity that has impacted everything from vehicles, guns, washing machines, and video games is being addressed by the law. As the shortfall continues to affect automakers, thousands of automobiles and trucks are still stalled in southeast Michigan while waiting for chips.
The law provides $52 billion in government subsidies for semiconductor development and domestic manufacture, a rare substantial incursion into American industrial policy. Additionally, it contains a $24 billion investment tax credit for semiconductor factories.
Tuesday, Biden stated, “The law would strengthen our efforts to produce semiconductors here in America.”
The law grants $200 billion over ten years to advance American scientific research so that it can compete more effectively with China. To pay for those investments, Congress would still need to adopt separate appropriations legislation.
China has opposed the semiconductor law through lobbying. China “firmly rejected” it, according to the Chinese Embassy in Washington, and compared it to a “Cold War mindset.”
Concerns about the magnitude of government funds given to successful semiconductor firms had been voiced by several progressive MPs.
The Commerce Department announced Friday that it would restrict the number of government subsidies for the production of semiconductors and would forbid businesses from using money to “stretch their bottom line.”
Pramila Jayapal, chair of the Congressional Progressive Caucus, stated that the caucus approved the proposal after extensive discussions with Commerce Secretary Gina Raimondo. The group had voiced fears that cash might be used by chip makers for stock buybacks or dividend payments.