After months of negotiations and many will-they or won’t-they moments, the U.S. House of Representatives and Senate sent to President Biden in the last week of July the CHIPS and Science Act of 2022.
The bill provides $52 billion to incentivize the domestic manufacturing of semiconductors and the equipment and tooling used to make them. This is an effort to combat China’s rise, with some estimating that Beijing invests up to $150 billion on semiconductors annually. The new law provides resources to map and support domestic downstream supply chains to prevent future disruptions similar to those being experienced now to identify vulnerabilities.
The National Science Foundation receives $81 billion over five years for R&D and other activities in the law with the National Institute for Standards and Technology (NIST) is allotted $102 billion, including $829 million for the Manufacturing USA public-private research institutes. The bill places a significant emphasis on STEM education and downstream supply chains, including on “forming, casting, machining, joining, surface treatment, tooling, and metal or chemical refining.”
As with any bill nearing 400 pages and costing $280 billion, it will take some time to implement, but many manufacturers have not seen this level of investment in the sector in generations. Now it is time for the agencies to begin implementing the law and working with industry. Stay tuned.