President Joe Biden signed a landmark bill on Tuesday providing $52.7 billion in subsidies for U.S. semiconductor manufacturing and research and boosting efforts to make the United States more competitive against China’s science and technology efforts.
“The future will be made in America,” Biden said, calling the measure “a once in a generation an investment in America itself.”
Biden touted the investments chip companies are making, even as it remains unclear when the U.S. Commerce Department will write rules to review the grants and how long it will take to secure the projects.
Some Republicans joined Biden on the White House lawn to attend the signing of the chip bill, which has been years in the works in Congress.
Executives from Micron, Intel, Lockheed Martin, HP and Advanced Micro Devices attended the signing, along with the governors of Pennsylvania and Illinois, the mayors of Detroit, Cleveland and Salt Lake City, and lawmakers.
The White House said the bill’s passage would spur new investment in microcircuits. It is noted that Qualcomm Monday agreed to buy $4.2 billion worth of additional semiconductor chips GlobalFoundries’ The New York plant has increased total purchases to $7.4 billion by 2028.
The White House also advertised Micron announcing a $40 billion investment in memory chip manufacturing that will increase its US market share from 2% to 10%, an the investment, he said, was planned with “anticipated grants” from the chip bill.
Progressives have argued that the bill is a handout to profitable chip companies that have previously closed U.S. factories, but Biden argued Tuesday that “this bill is not handing out blank checks to companies.”
The legislation aims to address a persistent shortage that has affected everything from cars, guns, washing machines and video games. Thousands of cars and trucks remain parked in southeast Michigan waiting for chips as the shortage continues to affect automakers.
A rare major foray into US industrial policy, the bill also includes 25% investment tax credits for chip manufacturing, worth an estimated $24 billion.
The legislation provides $200 billion over 10 years to boost U.S. research to better compete with China. Congress would still need to pass separate appropriations legislation to fund these investments.
China lobbied against the semiconductor bill. China’s embassy in Washington said China was “strongly opposed” to it, calling it reminiscent of a “Cold War mentality.”
Biden noted that the UNited states need chips for key weapons systems like Javelin missiles. “It’s no surprise that the Chinese Communist Party has actively lobbied US businesses against this bill,” Biden said.
Many U.S. lawmakers said they would not normally support large subsidies for private businesses, but noted that China and the European Union have given billions in incentives to their chip companies. They also cited national security risks and huge challenges in the global supply chain that are hampering global production.
Qualcomm will spend $4.2 billion more on chips from GlobalFoundries.
