On Monday, President Biden signed the CHIPS and Science Act of 2022, a $280 billion bill that clears the pathway for new chip foundries to be created on US ground. It’s a considerable investment in the domestic semiconductor industry, with $52 billion kept explicitly for manufacturing and research.
This news may sound unrelated to day-to-day life for those who don’t consume their time exploring the geopolitical chess moves made by governments. But there are practical advantages to the US reasserting its existence in the chip market—ones that even ordinary residents will witness, either directly or indirectly.
RELIABLE SUPPLY OF SILICON CHIPS
Right now, a considerable share of chip production is overseas, much of it in East Asia. Before the pandemic, this system functioned smoothly when the world was more pleased with the interdependence of a globalized economy. A particular region with a rich emphasis on specific factors of physical production delivered a better economy. It didn’t matter that the business devising a processor was headquartered an ocean away from where the final product would be built.
But since the Covid-19 pandemic, we’ve all seen how supply chain troubles (including massive shipping problems) have impacted the availability of all types of electronics and items that contain semiconductor electronics, like cars. It wasn’t just the PC parts that DIY builders and tech enthusiasts were starved for. More badly, costs soared too, due to high demand and low supply.
With more chips manufactured here in the US, disturbances from a major international event or political uncertainties should damage less. That implies more controlled and reliable production of goods, which in turn means a lower risk of sky-high expenses for buyers when catastrophe hits. It also eases the strain of periods when we ordinary folk have less spending power, like in a recession or a course of increased inflation.
MORE DOMESTIC JOBS
The time when we’ll see “Made in the USA” forged on silicon is still several years off, but producing the fabs will commence much sooner. So, naturally, that means more immediate job prospects for the regions where those factories are built. And once the foundries are finished, staffing positions will need filling: engineers, technicians, production managers, and more, in all kinds of lines.
Secondary employment opportunities extend from there, given that more services and housing will be needed for businesses pulling in more employees. It’s lucrative enough that we can predict more states to offer programs equivalent to New York’s $10 billion tax incentive.
But while the fabs are a top piece of the story, it’s not the whole of it. Approximately $13 billion of the reserves are meant to conduct R&D and workforce development. Another $500 million is earmarked for security and supply chain situations. So that broadens the prospects available.
Of course, you might not need a new gig presently. Maybe your family, friends, and acquaintances aren’t, either. But suppose you end up living in a region near a foundry. In that case, the local income that comes in could still influence your life positively. This US household semiconductor industry development won’t happen in a bubble.
And if you don’t end up living near a foundry? There’s $10 billion being assigned to develop “innovation and technology hubs” to help spur more tech hotspots like Silicon Valley, Austin, and Seattle. With more sites, people would have more options in their opportunities.
FUNDS FOR YOUR KIDS’ EDUCATION
Merely about 20 percent of the budget set aside by the CHIPS Act focuses on chip production. The remainder aims to rejuvenate scientific research and development related to technology. State agencies will funnel capital toward boosting the US’s endeavors in quantum information science, cybersecurity, AI, cutting-edge communications technologies like 6G, and more.
These steps require new workers to join the positions as time progresses, so about $13 billion is put aside to strengthen participation in the study of STEM fields, as reported by CNN. In addition, the US administration has its sight on supporting underrepresented populations getting into research professions in these areas, including minorities, women, and locals of rural areas who may not have access to adequate STEM schooling.
As summarized in the White House fact sheet on the CHIPS Act, this investment will enclose education at all levels, spanning K-12, community college, and undergraduate and graduate studies. The US government will need to judiciously dole out these funds to make sure ordinary people tangibly benefit—beyond uniform access to chip-powered goods necessary for everyday life.
