50 Facts About CHIPS And Science Act

What is the CHIPS and Science Act?

The CHIPS and Science Act is a groundbreaking piece of legislation aimed at revitalizing the U.S. semiconductor industry and boosting research in emerging technologies. Signed into law by President Joe Biden on August 9, 2022, this act represents a significant shift in U.S. industrial policy.

1. Enactment: The CHIPS and Science Act was signed into law by President Joe Biden on August 9, 2022.
2. Purpose: Its main goal is to revitalize the U.S. semiconductor industry, reduce dependence on foreign suppliers, and enhance national security.
3. Funding: The act authorizes approximately $280 billion in new funding over the next ten years to support domestic semiconductor research and manufacturing.
4. Divisions: The act is divided into three main divisions: the CHIPS Act of 2022, the Research and Development, Competition, and Innovation Act, and the Supreme Court Security Funding Act of 2022.

Key Components of the CHIPS Act

The CHIPS Act focuses on creating incentives for semiconductor production, aiming to boost domestic manufacturing and development. Let's break down its key components.

5. CHIPS Act: This division focuses on creating helpful incentives to produce semiconductors, aiming to boost domestic semiconductor manufacturing and development.
6. Research and Development: The act invests $170 billion over five years in R&D initiatives across multiple federal agencies, including the NSF, DOE, NIST, and others.
7. Tax Credits: The act provides a 25% investment tax credit for companies investing in semiconductor production in the United States, estimated to cost $24 billion over five years.
8. Semiconductor Manufacturing: The act includes $39 billion in direct financial assistance for the construction and expansion of semiconductor fabrication facilities.
9. Workforce Development: It allocates $11 billion for semiconductor manufacturing research and workforce development.
10. Defense Spinoffs: The act provides $2 billion to accelerate defense spinoffs from chip-related laboratory advancements.
11. Wireless Supply Chain: It includes $1.5 billion for public wireless supply-chain innovation.

Advanced Technologies and National Security

The CHIPS and Science Act also supports research in advanced technologies and includes provisions to enhance national security.

12. Advanced Technologies: The act supports R&D in advanced and emerging technologies like AI, quantum computing, advanced energy, and biotechnology.
13. National Security: The act includes provisions to limit the expansion of semiconductor manufacturing in China and Russia for recipients of funding and tax credits.
14. Research Security: The act requires the NSF to maintain a Research Security and Policy Office, conducts risk assessments of R&D award applications, and mandates annual reporting on foreign financial support.
15. Foreign Talent Recruitment: It requires federal research agencies to distribute uniform guidelines related to foreign talent recruitment programs and disclosure requirements.
16. Training Requirements: The act includes provisions requiring research security training for federal research award personnel and certification from institutions that this training has been provided.

STEM Workforce and NASA Initiatives

The act aims to create a bigger, more inclusive STEM workforce and directs NASA to establish new programs.

17. STEM Workforce: The act aims to create a bigger, more inclusive STEM workforce by investing in workforce development and diversity, equity, and inclusion efforts.
18. NASA Initiatives: It directs NASA to establish a “Moon to Mars Program Office” and invests in STEM, workforce development, and R&D initiatives.

Funding for Federal Agencies

Several federal agencies receive significant funding under the CHIPS and Science Act to support various R&D initiatives.

19. NSF Funding: The act allocates $80 billion to the National Science Foundation over five years for various R&D initiatives.
20. DOE Funding: It invests in the Department of Energy's Office of Science for fundamental and use-inspired research to sustain U.S. leadership in sciences and engineering.
21. NIST Funding: The act provides funding to the National Institute of Standards and Technology for R&D and workforce development in semiconductor manufacturing.
22. EDA Funding: It includes funding for the Economic Development Administration to support regional high-tech hubs and economic development initiatives.

Impact on the U.S. Economy and Job Creation

The CHIPS and Science Act aims to catalyze private investment and create jobs, strengthening the U.S. economy.

23. Private Investment: The act aims to catalyze hundreds of billions more in private sector semiconductor investment across the country.
24. Global Production: The U.S. currently produces about 10% of the world’s semiconductors, with none of the most advanced types, relying heavily on East Asia for 75% of global production.
25. Historical Context: The U.S. semiconductor industry has declined significantly over the past few decades, with the federal government's share of total R&D spending declining sharply from 2% of GDP in the mid-1960s to less than 1% by 2020.
26. Economic Impact: Public expenditures on R&D have tangible economic benefits, supporting over 1.6 million jobs in the U.S. in 2018 alone.
27. Job Creation: The act aims to create tens of thousands of good-paying, union construction jobs and thousands more high-skilled manufacturing jobs.

Strengthening Supply Chain Resilience

The act strengthens American supply chain resilience by promoting domestic semiconductor production and reducing dependence on foreign suppliers.

28. Supply Chain Resilience: The act strengthens American supply chain resilience by promoting domestic semiconductor production and reducing dependence on foreign suppliers, particularly in geopolitically sensitive locations like Taiwan.
29. National Defense: The act includes provisions essential to national defense, such as funding for microelectronics research, fabrication, and workforce training.
30. 5G Supply Chains: It allocates $1.5 billion to enhance the competitiveness of software and hardware supply chains of open RAN (radio access network) 5G networks.

Establishing Research Hubs and Technology Directorates

The act establishes new research hubs and directorates to focus on advanced technologies and commercialization.

31. Research Hub: The act establishes a new public research hub called the National Semiconductor Technology Center, with $2 billion in funding.
32. Manufacturing USA: It allocates $500 million to Manufacturing USA for advanced semiconductor research and development.
33. Tax Benefits: The act includes $39 billion in tax benefits, loan guarantees, and grants administered by the Department of Commerce to encourage American companies to build new chip manufacturing plants in the U.S.
34. Advanced R&D: It allocates $11 billion for advanced semiconductor research and development, with $8.5 billion going to the National Institute for Standards and Technology.
35. Technology Directorate: The act establishes a technology, innovation, and partnerships directorate at the National Science Foundation to focus on fields like semiconductors and advanced computing.
36. Commercialization: It strengthens commercialization of research and technology, ensuring that what is invented in America is made in America.

Supporting Quantum Computing and Biotechnology

The act supports research in critical areas like quantum computing and biotechnology, which have significant implications for the future.

37. Quantum Computing: The act supports research in quantum computing, a critical area for future technological advancements.
38. Biotechnology: It invests in biotechnology research, which has significant implications for healthcare and other industries.
39. Advanced Energy: The act includes funding for advanced energy technologies, which are crucial for sustainable development and reducing carbon emissions.
40. Materials Science: It supports research in materials science, essential for developing new materials and technologies.
41. Experimental Physics: The act invests in experimental physics research, which is fundamental to advancing our understanding of the universe and developing new technologies.

Promoting Workforce Development and Diversity

The CHIPS and Science Act includes provisions for workforce development and promotes diversity, equity, and inclusion in STEM fields.

42. Workforce Development: It includes provisions for workforce development, ensuring that the U.S. has a skilled workforce capable of supporting the semiconductor industry and other high-tech sectors.
43. Diversity and Inclusion: The act promotes diversity, equity, and inclusion efforts in STEM education and workforce development, aiming to make these fields more inclusive and representative of the broader population.

Creating Regional High-Tech Hubs

The act supports the creation of regional high-tech hubs to distribute the benefits of technological advancements across different regions of the country.

44. Regional High-Tech Hubs: It supports the creation of regional high-tech hubs, which will help distribute the benefits of technological advancements across different regions of the country.

Encouraging Private Sector Investment

By providing incentives and tax credits, the act aims to unlock significant private sector investment in domestic semiconductor production.

45. Private Sector Investment: The act aims to unlock hundreds of billions more in private sector semiconductor investment by providing incentives and tax credits to companies investing in domestic semiconductor production.

Addressing National Security and Global Competition

The CHIPS and Science Act has significant national security implications and is part of a broader strategy to counter China's rise in the tech sector.

46. National Security Implications: The act has significant national security implications, as it reduces dependence on foreign suppliers and promotes domestic production of critical technologies like semiconductors.
47. Global Competition: The legislation is part of a broader strategy to counter China's rise in the tech sector, which has been a major driver behind the U.S. industrial policy initiatives.

Historical Significance and Legislative Process

The CHIPS and Science Act marks a significant shift in U.S. industrial policy and reflects a renewed commitment to investing in domestic research and development.

48. Historical Significance: The CHIPS and Science Act marks a significant shift in the U.S. industrial policy, reflecting a renewed commitment to investing in domestic research and development to maintain technological leadership.
49. Legislative Process: The bill passed the U.S. Senate by a vote of 64–33 on July 27, 2022, and the U.S. House by a vote of 243–187–1 on July 28, 2022.

Long-Term Economic Impact

The act is expected to have a positive impact on the U.S. economy over the long term, creating jobs, stimulating innovation, and enhancing national security.

50. Impact on Economy: The act is expected to have a positive impact on the U.S. economy over the long term, creating jobs, stimulating innovation, and enhancing national security by promoting domestic production of critical technologies.

The Impact of the CHIPS and Science Act

The CHIPS and Science Act is a game-changer for the U.S. semiconductor industry and beyond. By pumping $280 billion into semiconductor research and manufacturing, it aims to reduce reliance on foreign suppliers and boost national security. With $39 billion for building new chip plants and $170 billion for R&D initiatives, the act is set to create thousands of jobs and stimulate innovation. It also focuses on workforce development, diversity, and inclusion in STEM fields. Provisions to limit semiconductor manufacturing in China and Russia for funding recipients highlight its strategic importance. This act is not just about chips; it’s about securing America’s technological future and maintaining a competitive edge globally. From quantum computing to biotechnology, the CHIPS and Science Act is poised to have a lasting impact on the U.S. economy and technological landscape.