President Joe Biden stated that laws he oversaw increased private sector investment in the semiconductor sector prior to his 2024 State of the Union speech. At a county leaders’ meeting in Washington, D.C. on February 12, Biden stated, “I signed the CHIPS and Science Act, which attracted $640 billion in private companies’ investments that are building factories, creating jobs in America again.” The White House has stated this number several times, although it has been ascribed to more than simply the CHIPS Act, as Biden has signed other pieces of legislation. According to economists, all of the expenditure may not materialize or may take years to materialize. These figures are predicated on corporate statements. The amount invested rose prior to the law’s passage.
Understanding the CHIPS and Science act:
Semiconductors are “the brains of modern electronics,” according to the Semiconductor Industry Association. They are also known as integrated circuits or microchips. According to the organization, they are frequently manufactured of silicon and are utilized in sophisticated wireless networks, medical equipment, communications devices, computers, military, clean energy, and transportation.
A rare example of bipartisanship, the CHIPS and Science Act was sponsored in 2021 by the US Representative Tim Ryan, D-Ohio, and approved with the backing of 24 House members and 17 Republicans in the Senate. The bill was ratified by Biden in August 2022. The law was intended to assist the United States compete with China and pass in the midst of a global scarcity of semiconductors.
The CHIPS Act, according to analysts at the consulting firm McKinsey, is a $280 billion expenditure plan spread over ten years that contains $53 billion for manufacturing and research funding. According to Dean Baker, co-founder of the liberal Center for Economic and Policy Research, Biden’s calculations make sense when taking into account the positive effects all three acts will have on the economy. Estimating the amount that laws encourage private investment, he continued, is difficult as it is impossible to determine how much investment may have occurred in the absence of the legislation.
Semiconductor manufacturing expansion
Since 2020, when the CHIPS and Science Act’s antecedent legislation was presented, $256 billion in private investments have been announced across 22 states, according to a study updated on February 26 by the Semiconductor Industry Association. The semiconductor maker GlobalFoundries said in February that, after the U.S. Commerce Department’s approval of a $1.5 billion grant to the New York-based business, it will invest over $12 billion over the next ten years or more. With the funds, GlobalFoundries plans to grow and increase its manufacturing capacity in order to increase chip production.In an August letter, the U.S. Chamber of Commerce stated that both the federal government and the private sector had made “significant strides” in putting the legislation into practice. However, the chamber demanded further actions to widen the talent pipeline, like funding for K–12 education. The association stated that “immigration reform is also necessary to meet current and future talent needs for the semiconductor industry.”
| Fact | Details |
| Total Private Investments Attracted | Private corporations invested $640 billion in the CHIPS and Science Act. |
| Finance for Semiconductor Manufacturing | The legislation allocates $52.7 billion for workforce development and research and development of semiconductors in the United States. |
| Tax Credits for the Manufacturing of Chips | The measure provides tax rebates for the creation of chips worth $24 billion. |
| Finance for Cutting-Edge Innovations | Programs focused on cutting-edge technologies and wireless supply chains have been allotted $3 billion. |
| Department of Commerce Supervision | Over a five-year period, the Department of Commerce will supervise expenditures totaling $50 billion to increase domestic semiconductor production. |
Final Words
In conclusion, During the presidency of Joe Biden, “private companies have announced $649 billion so far in commitments to invest in 21st century industries like $235B Semiconductors & Electronics.” Then, further industries are included. According to the website, news stories, press announcements, and data from trade groups were used in order to get that figure.
The website lists a number of laws, such as the Bipartisan Infrastructure Law and the Inflation Reduction Act, that were approved during the Biden administration. Biden’s figures are predicated on what businesses have declared. That differs from money that has already been spent. “While these are fantastic announcements, they are not real investments,” stated Douglas Holtz-Eakin, head of the American Action Forum, a center-right organization. He stated that some of these investments might never materialize and that even if they do, we won’t be able to predict when.
