An Update on the CHIPS Act of 2022
Signed into law in July 2022, the CHIPS Act made big headlines as it made its way through Congress with bipartisan support. With this key piece of legislation in place, we’re already beginning to see the effects of reinvestment in American semiconductor manufacturing. Early efforts to create momentum show just how important the CHIPS Act will be in changing the trajectory of the global semiconductor market.
A recap of the CHIPS Act
America’s semiconductor supply chain is at historic lows. Semiconductors are the crucial building blocks in the products and goods Americans use every day — from vacuum cleaners to medical equipment. They’re essential components that even have an impact on the country’s national security, and it’s clear America can no longer rely on foreign production to meet modern demands.
Both parties in Congress saw an immediate need to strengthen U.S. semiconductor production. The act encourages American semiconductor design, research, and manufacturing, providing more than $52 billion in funding for semiconductor manufacturers across the country.
Early efforts prove the efficacy of the CHIPS Act
Early indications show the CHIPS Act is working, and companies are moving quickly to capitalize on newly available funding. In a recent triumph that’s directly attributable to the CHIPS Act, semiconductor company Micron has announced a plan to build the largest semiconductor fabrication facility America has ever seen. Micron has pledged to invest up to $100 billion in its new production plant with the help of CHIPS Act funding.
Intel has broken ground on a $20 billion chip plant in Ohio, with plans to create another $20 billion manufacturing hub in Arizona. There are several other companies that want a piece of the pie, which has pushed a feeling of optimism into a market plagued with demand. America needs chips fast, and funding from the CHIPS Act is positioning the country for a more stable chip supply chain.
The road to reshaping semiconductor production
The CHIPS Act represents one of the few across-the-aisle efforts in Congress today. Despite a divided political landscape, members of both parties understand how important domestic chip production is — not just to the manufacturing sector, but to economic and domestic security as well. Manufacturing associations, like the National Association of Manufacturers, are praising the bipartisan effort of the CHIPS Act.
While America won’t see progress overnight, the act is a forward-looking, long-term piece of legislation set to help the country’s semiconductor manufacturers alleviate the many issues stemming from overseas bottlenecks. The journey toward a reliable source of chips for America is just beginning, and manufacturing professionals must heed the call to bring these essential components back home.