President Joe Biden signed a $280 billion legislative package on Tuesday that includes billions of dollars in subsidies to boost U.S. semiconductor manufacturing and keep the country competitive with China.
“The future of the chip industry is going to be made in America,” Biden said at a bill signing event.
The law sets aside $52.7 billion to support U.S. chip development, including $39 billion in manufacturing incentives. It also gives a 25% federal tax credit to companies investing in semiconductor production, according to a White House fact sheet.
Biden said that the law has already spurred businesses to expand U.S. production. Chip supplier Micron said the same day as the signing it would invest $40 billion through the end of the decade in U.S. memory chip manufacturing.
Meanwhile, Qualcomm announced Monday it would expand its partnership with U.S. manufacturer GlobalFoundries following passage of the bill, noting the new agreement will boost wafer capacity.
To receive subsidies, businesses must demonstrate “significant worker and community investments, including opportunities for small businesses and disadvantaged communities,” according to a White House fact sheet. Companies that receive funding will be barred from expanding certain investments in China.
“America invented the semiconductor ... and this law brings it back home,” said Biden. “It’s in our economic interest and it’s in our national security interest to do so.”