Grants and Incentives for U.S. Semiconductor Manufacturing has Passed Legislation

Congress recently passed the Chips and Science Act (CHIPS: Act), after three years of ups and downs, and now President Biden plans to sign the bill into law.

The CHIPS: Act is a $52 billion package which will help boost semiconductor manufacturing in the U.S, as well as tax incentives to help prompt investments in chipmaking. An additional $200 billion is allocated towards scientific research into artificial intelligence (AI), robotics, quantum computer, and other cutting-edge fields – CNBC reports.

What Is In The Bill?

Many in the semiconductor industry feels this as a big win, however, the impact may take a few years to really be felt. It takes time to build a chip plant, as well as finding enough people to staff a new facility.

As CNBC mentions, regulations, labor costs, and other roadblocks are all common in U.S. manufacturing can further slow the process and timetable for when companies in the U.S. are able to obtain these home-grown chips.

However, this bill provides financial incentives to help make manufacturing facilities in the U.S. more attractive. In turn companies have pledged to build billion dollar chip plants in the U.S., which also results in thousands of more jobs.

$39 billion would go to direct financial assistance for companies building chip manufacturing plants at home. Furthermore, $11 billion is bookmarked to advance chip manufacturing research and workforce training, while $2 billion is set aside to move lab innovation into military and other applications, CNBC reports.

Some additional provisions in the package, courtesy of Transport Topics:

  • 25% tax credit for the manufacture of semiconductors and tolls to create semiconductors
  • $500 million for an international secure communications program
  • $200 million for semiconductor industry working training
  • $1.5 billion for public wireless supply chain innovation
  • Authorizes new programs under Energy Department
  • Changes and authorizes funding for programs in the National Space and Aeronautics Administration, National Institute of Standards and Technology, and National Science Foundation

An Investment In The Semiconductor Industry

The chip shortage today is apparent and many feel with this new funding, it has created a significant investment in the semiconductor industry. House Representative Tom Cole stated, “The measure includes a significant investment in our semiconductor industry so that we will be able to manufacture those critical pieces of technology domestically, plus significant investments in the sciences.”

Additionally, Senate Commerce Committee Chairwoman Maria Cantwell described the reasons this bill is important stating she knows there is going to be a chip demand three times greater in the near future, than what it’s like today, “if we don’t start building here, we’re not going to catch up.”

American Trucking Associations also is in support of it stating, “semiconductors and computer chips make our economy and industry run – right down to the trucks we drive – and we have seen the consequences of decades of neglecting domestic manufacturing of these critical components,” Bill Sullivan, the Vice President of Advocacy said.

Looking Ahead

As always, if you would like more information regarding this topic, contact our team at InterlogUSA and we will be happy to assist you on any questions or comments you may have! In addition, we have our weekly market updates that can provide you with relevant freight news, updates, developments across the industry, and more.


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