During his first year in office, President Biden and the Biden-Harris Administration implemented an industrial strategy aimed at revitalizing domestic manufacturing, creating good-paying American jobs, strengthening U.S. supply chains, and accelerating the industries of the future. These policies have driven an historic recovery in manufacturing, resulting in 642,000 new manufacturing jobs since 2021. Companies are investing in America again, bringing high-paying manufacturing jobs back home. In fact, the construction of new manufacturing facilities has surged by 116% compared to last year.
Today, President Biden will sign the bipartisan CHIPS and Science Act of 2022 into law, which builds on this progress and makes historic investments that will position U.S. workers, communities, and businesses to win the race for the 21st century. This legislation strengthens American manufacturing, supply chains, and national security, while also investing in research and development, science, and technology. It ensures that the U.S. remains a global leader in tomorrow's industries, including nanotechnology, clean energy, quantum computing, and artificial intelligence.
The CHIPS and Science Act represents a strategic effort to make the smart investments necessary for Americans to compete in—and ultimately win—the future. By targeting industries with the greatest potential for innovation and economic growth, the U.S. will continue to lead the way in global technological advancement.
Thanks to the passage of the CHIPS and Science Act of 2022, this week companies have announced nearly $50 billion in new investments in U.S. semiconductor manufacturing, bringing the total business investment to nearly $150 billion since President Biden took office:
Micron is leading the way with a $40 billion investment in memory chip manufacturing, which is essential for computers and electronic devices. This investment is set to create up to 40,000 new jobs in construction and manufacturing. Over the next decade, this will increase the U.S. market share of memory chip production from less than 2 percent to as much as 10 percent.
Additionally, Qualcomm and GlobalFoundries are forming a new partnership that includes a $4.2 billion investment to expand GlobalFoundries’ upstate New York facility. Qualcomm, the world’s leading fabless semiconductor company, has announced plans to boost U.S. semiconductor production by up to 50 percent over the next five years.
The CHIPS and Science Act is designed to enhance American semiconductor research, development, and production, securing U.S. leadership in technology that powers everything from cars and household appliances to defense systems. While America invented the semiconductor, it now produces only about 10 percent of the world’s supply and lacks a significant share of the most advanced chips. Instead, the U.S. relies on East Asia for 75 percent of global production. The CHIPS and Science Act aims to unlock hundreds of billions more in private sector semiconductor investment across the country, including production crucial to national defense and other vital sectors.
Furthermore, the law ensures that the United States maintains its technological and scientific leadership. In the mid-1960s, during the height of the space race, the federal government invested 2 percent of GDP in research and development. By 2020, that number had fallen to less than 1 percent. Economic prosperity over the past four decades has been concentrated in a few coastal regions, leaving many communities behind. The CHIPS and Science Act will ensure that the future is made in ALL of America, opening doors to science and technology for those who have historically been excluded.
The Biden-Harris Administration has already taken steps to ensure the swift and responsible deployment of funding from the CHIPS and Science Act:
Coordinated Permitting for High-Tech Manufacturing
Today, the Administration is announcing the creation of a sector-specific interagency expert working group focused on permitting and related project delivery challenges for high-tech manufacturing, in line with the President’s Permitting Action Plan announced in May. This working group will build upon the efforts of the interagency collaboration between the Council on Environmental Quality, Environmental Protection Agency, and the Department of Commerce, established as part of the CHIPS and Science Act. Its goal is to enhance collaboration and coordination across federal agencies, the private sector, and state and local governments to ensure timely and efficient reviews of federally funded projects. Additionally, the working group will serve as a clearinghouse for best practices in permitting and project delivery to support the effective implementation of projects funded by the Act.
President’s Council of Advisors on Science and Technology (PCAST) Releases New Recommendations on Semiconductors R&D
PCAST has also issued a letter to the President outlining its recommendations for the implementation of the CHIPS and Science Act. Key suggestions include the establishment of a national microelectronics training network to support semiconductor workforce development across academic institutions, including minority-serving institutions and community colleges. They also emphasize reducing barriers for startups to foster innovation and recommend the creation of a “chiplet platform” to enable quicker and more cost-effective innovation. Additionally, PCAST advocates for setting a national semiconductor research agenda, including tackling grand challenges like developing the first “zettascale supercomputer,” which would be 1,000 times faster than the fastest supercomputer available today. The full PCAST semiconductor report will be released this fall.
The CHIPS and Science Act will:
Strengthen U.S. Leadership in Semiconductors
The CHIPS and Science Act allocates $52.7 billion to support American semiconductor research, development, manufacturing, and workforce growth. This includes $39 billion in manufacturing incentives, such as $2 billion for legacy chips used in automobiles and defense systems, $13.2 billion for R&D and workforce development, and $500 million for international ICT security and semiconductor supply chain efforts. Additionally, the Act offers a 25% investment tax credit for capital expenses related to semiconductor manufacturing and equipment. These investments will secure domestic supply, create tens of thousands of high-paying union construction jobs, generate thousands of skilled manufacturing jobs, and attract hundreds of billions in private sector investment.
The Act also requires recipients to demonstrate significant investment in workers and communities, with a focus on small businesses and disadvantaged communities to ensure equitable economic growth. It includes strong safeguards to prevent the construction of certain facilities in China and other nations of concern, and prohibits the use of taxpayer funds for stock buybacks and shareholder dividends. Furthermore, it supports union construction jobs by mandating Davis-Bacon prevailing wage rates for projects funded by the CHIPS Act.
Promote U.S. Innovation in Wireless Supply Chains
The CHIPS and Science Act includes $1.5 billion to support the development and deployment of wireless technologies that utilize open and interoperable radio access networks. This will further enhance U.S. leadership in wireless technologies and strengthen the nation’s wireless supply chains.
Advance U.S. Global Leadership in Future Technologies
U.S. leadership in emerging technologies such as artificial intelligence, biotechnology, and computing is essential for our future economic competitiveness and national security. Public investment in R&D lays the groundwork for breakthrough innovations that drive new businesses, create jobs, and increase exports.
The CHIPS and Science Act establishes a technology, innovation, and partnerships directorate at the National Science Foundation (NSF), focusing on fields like semiconductors, advanced computing, communications technology, energy technologies, quantum information, and biotechnology. It will also foster the commercialization of research, ensuring that what is invented in America is made in America. The Act reauthorizes and expands research at the Department of Energy’s Office of Science and the National Institute of Standards and Technology to maintain U.S. leadership in the sciences and engineering.
Catalyze Regional Economic Growth
The CHIPS and Science Act authorizes $10 billion for regional innovation and technology hubs across the country, bringing together state and local governments, universities, labor unions, businesses, and community organizations to form partnerships that foster technological and manufacturing growth.
These hubs will create jobs, boost regional economic development, and position communities to lead in high-growth sectors like artificial intelligence, advanced manufacturing, and clean energy. Additionally, a $1 billion RECOMPETE pilot program at the Department of Commerce’s Economic Development Administration (EDA) will address persistent economic distress and promote long-term development in the most economically challenged communities.
Expand STEM Opportunities Across America
The CHIPS and Science Act recognizes that science, technology, engineering, and mathematics (STEM) education is essential for developing the skilled workforce needed for emerging industries. To ensure that more Americans, especially those from marginalized and underserved communities, can participate in STEM education and training, the Act authorizes investments in STEM programs from K-12 through community colleges, as well as undergraduate and graduate education.
Promote Opportunity and Equity in STEM and Innovation
The legislation also includes investments to expand the diversity of research institutions and the students they serve, with particular emphasis on supporting Historically Black Colleges and Universities (HBCUs), minority-serving institutions, and other institutions serving historically underserved communities. These efforts, primarily through the NSF, aim to broaden the geographic diversity of research and innovation funding, ensuring that talent from across the nation is tapped. Additionally, the Act empowers agencies to combat sexual and gender-based harassment in the sciences, which has been a barrier to STEM participation for too many Americans. Through these initiatives, the Act will help build a more inclusive STEM ecosystem that reflects and benefits all of America.