Biden signs major semiconductors investment bill to compete against China

WASHINGTON (AFP) — President Joe Biden signed into law Tuesday a multibillion dollar bill boosting domestic semiconductor and other high-tech manufacturing sectors that U.S. leaders fear risk being dominated by rival China.

The Chips and Science Act includes around $52 billion to promote production of microchips, the tiny but powerful and relatively hard-to-make components at the heart of almost every modern piece of machinery.

Tens of billions of dollars more are allocated for scientific research and development.

The White House says the government commitment to bolstering hightech industries is already drawing in large-scale private investors, with

some $50 billion in new semiconductor investment alone. The lion’s share of that is a plan announced by U.S.

firm Micron to put $40 billion into domestic expansion by 2030.

Biden said at a White House speech that the cash injection from the Chips Act will help “win the economic competition in the 21st century.”

Entrepreneurs are “the reason why I’m so optimistic about the future of our country,” he said, and “the Chips and Science Act supercharges our efforts to make semiconductors here in America.”

One of the Democrat’s key themes since taking office has been the need to revamp U.S. leadership in cutting-edge innovation and rebuild the homegrown industrial base in the face of China’s mammoth state-backed investments.

Semiconductors are of particular concern because they are vital to everything from washing machines to sophisticated weapons and nearly all are made abroad.

Although the semiconductor was invented in the United States, the country only produces around 10 percent of global supply, according to the White House, with some 75 percent of U.S. supplies coming from east Asia.

“Today’s signing of the bipartisan Chips Act is a historic investment in America’s future. It will boost microchip production at home, strengthen our supply chains, increase domestic research and development, and bolster our national security,” said U.S. Chamber of Commerce vice president Neil Bradley.

Biden is also counting on the Chips Act to generate enthusiasm among voters, as his Democratic party tries to defend a thin congressional majority from a Republican takeover in this November’s midterm elections.