Amid a global shortage of microchips, U.S. president Joe Biden on Tuesday signed into law a multi-billion dollar bill to boost domestic production of semiconductors and research. This law will hope to counter fears that the country is losing its technological edge to China. The Chips and Science Act. provides around $52 billion to promote production of microchips. Billions of dollars have been allocated for scientific research and development as well.
U.S President Joe Biden called the bill a once in a generation investment in America. He said that research and development funding is going to ensure the United States leads the world in the industries of the future from quantum computing to artificial intelligence to advanced biotechnology. The bill also includes 25 % investment tax credit for chip plants estimated to be worth $24 billion. $200 billion have also been authorized over 10 years to boost U.S scientific research to better compete with China.
Congress would still need to pass a separate legislation to fund those investments. Semiconductors are microchips that are tiny but extremely powerful, from operating smart phones or washing machines and cars to sophisticated weapons they are important piece of every modern piece of machinery. Although the semiconductor was invented in the United States, the country only produces less than 10% of global supply. Taiwan and South Korea are the world’s leading producers of these microchips. As the November midterm election approach, Biden will count on the chips act to generate enthusiasm among voters as the Democratic Party tries to defend a thin Congressional majority.