global semiconductor shortage? AI,
CHIPS and Science Act
CHIPS and Science Act - REVIEWS
global semiconductor shortage
================================================
that worldwide demand will keep growing,
with semiconductors poised to become a $1 trillion industry by the end of the decade.
=====================================================================================
The CHIPS and Science Act: Here’s what’s in it
The act invests $280 billion to bolster US semiconductor capacity, catalyze R&D, and create regional high-tech hubs and a bigger, more inclusive STEM workforce.
======================================================================================
CHIPS and Science Act
global semiconductor shortage ?
leading-edge technologies,
quantum computing, AI,
==========================================
The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS Act), signed into law on August 9, 2022,
===============================================
is designed to boost US competitiveness,
innovation, and national security.
===============================================
leading-edge technologies,
quantum computing, AI,
The law aims to catalyze investments in domestic semiconductor manufacturing ===============================================
capacity. It also seeks to jump-start R&D and commercialization of
leading-edge technologies,
quantum computing, AI,
clean energy, and
nanotechnology,
and create new regional high-tech hubs
and a bigger, more inclusive science,
technology,
engineering, and
math (STEM) workforce.
===============================================
Here is a breakdown of the law’s key provisions.
By the numbers: The CHIPS Act directs $280 billion in spending over the next ten years. The majority—$200 billion—is for scientific R&D and commercialization.
Some $52.7 billion is for semiconductor manufacturing,
R&D, and workforce development, with another $24 billion worth of tax credits for chip production.
There is $3 billion slated for programs aimed at leading-edge technology and wireless supply chains.
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================================================The chips are down: The United States makes
12 percent of the world’s semiconductors, compared with 37 percent
in the 1990s, according to US government statistics.
1 ================================================
Many US firms are dependent on chips made abroad,
and the fragility of those supply chains
has been laid bare over the past 18 months.
Moreover, McKinsey research estimates
================================================
that worldwide demand will keep growing,
with semiconductors poised to become a $1 trillion industry by the end of the decade.
=====================================================================================
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=====================================================================================
Shoring up semiconductors: Shortages of semiconductors dented US economic growth by nearly a quarter-trillion dollars in 2021, according to the US Department of Commerce.1 To expand domestic manufacturing of mature and advanced semiconductors, the Department of Commerce will oversee $50 billion in investments over five years, including $11 billion for advanced semiconductor R&D and $39 billion to accelerate and drive domestic chip production ($6 billion of which can cover direct loans and loan guarantees).
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Boosting national security and 5G supply chains: The CHIPS Act allocates $2 billion to the US Department of Defense to fund microelectronics research, fabrication, and workforce training. An additional $500 million goes to the US Department of State1 to coordinate with foreign-government partners on semiconductor supply chain security. And $1.5 billion funds the USA Telecommunications Act of 2020, which aims to enhance competitiveness of software and hardware supply chains of open RAN (radio access network) 5G networks.
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About those tax credits: Given the scale of investment required, building new semiconductor fabrication plants will take more than government funding. Private investment is needed too.
Under the CHIPS Act, taxpaying entities receive a 25 percent advanced manufacturing investment tax credit for investments in semiconductor manufacturing and processing equipment—an outlay the Congressional Budget Office estimates will cost $24 billion over five years.
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STEM, the moon, and Mars: The law authorizes (but does not yet appropriate) $174 billion over the next five years to various federal science agencies to invest in STEM, workforce development, and R&D, with some $80 billion earmarked for the National Science Foundation. Though specific funding was not allocated to NASA, the law does direct the space agency to establish a “Moon to Mars Program Office.”
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ABOUT THE AUTHOR(S)
Justin Badlam is an expert in McKinsey’s Washington, DC, office, where Stephen Clark is an associate partner, Suhrid Gajendragadkar and Adi Kumar are senior partners, and Sara O’Rourke is a partner; and Dale Swartz is an associate partner in the Silicon Valley office.
The authors wish to thank Ed Barriball, Andy Braden, Henry Feldman, Christine Herrmann, and Grace Zimmerly for their contributions to this article.
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Background and provisions
The bill constitutes an industrial policy
=======================================================================================
initiative which takes place against
the background of a perceived
________________________________________________________________________________________
=======================================================================================
AI Cold War between the US and China,
as artificial intelligence technology
relies on semiconductors.
_______________________________________________________________________________________
================================================
The bill was considered amidst
a global semiconductor shortage
and intended to provide subsidies
and tax credits to chip makers
with operations in the United States.
=======================================================================================
________________________________________________
The U.S. Department of Commerce was granted
the power to allocate funds based on companies' willingness to sustain research,
build facilities,
and train new workers.
For semiconductor and telecommunications purposes, the CHIPS Act designates roughly $106 billion.
=======================================================================================
The CHIPS Act includes $39 billion in tax benefits
and other incentives to encourage American companies to build new chip manufacturing plants in the U.S.
=======================================================================================
Additionally, $11 billion would go toward advanced semiconductor research and development, separable into $8.5 billion of that total going to the National Institute for Standards and Technology, $500 million of the $11 billion to Manufacturing USA,
and $2 billion of the former to a new public research hub called the National Semiconductor Technology Center.
$24 billion would go to a new 25 percent advanced semiconductor manufacturing tax credit to encourage firms to stay in the United States,
and $200 million would go to
the National Science Foundation
to resolve short-term labor supply issues.
According to McKinsey, "The CHIPS Act allocates $2 billion to the Department of Defense to fund microelectronics research, fabrication, and workforce training.
================================================
An additional $500 million goes to the Department
of State to coordinate with foreign-government
partners on semiconductor supply chain security.
And $1.5 billion funds the USA Telecommunications Act of 2020, which aims to enhance competitiveness
of software and hardware supply chains
of open RAN 5G networks."
Companies are subjected to a ten-year ban prohibiting them from producing chips more advanced than 28-nanometers in China and Russia
if they are awarded subsidies under the act.
======================================================================================
The act authorizes $174 billion for uses
other than semiconductor
and telecom technologies.
======================================================================================
It authorizes, but does not appropriate,
extended NASA funding for the International Space Station to 2030,
partially funds the Artemis program
returning humans to the Moon,
and directs NASA to establish a Moon to Mars Program Office for a human mission to Mars
beyond the Artemis program.
=======================================================================================
The bill also obligates NASA to perform research
into further domesticating its supply chains
and diversifying
and developing its workforce,
=======================================================================================
reducing the environmental effects of aviation, integrating unmanned aerial vehicle detection
with air traffic control,
======================================================================================
investigating nuclear propulsion for spacecraft, continuing the search for extraterrestrial intelligence
=====================================================================================
and xenology efforts, and boosting astronomical surveys for Near-Earth objects including the NEO Surveyor project.
The bill could potentially invest $67 billion in accelerating advanced zero-emissions technologies (such as improved energy storage, hydrogen economy technologies, and carbon capture and storage) to mass markets, advancing building efficiency, and improving climate science research, according to the climate action think tank
Rocky Mountain Institute.
===============================================
The bill would invest $81 billion in the NSF, including new money for STEM education
and defense against foreign intellectual property infringement,
and $20 billion in the new Directorate f
or Technology, Innovation, and Partnerships, which would be tasked with deploying the above technologies, and authorizes but does not appropriate $12 billion for ARPA-E.
====================================================================================
It contains annual budget increases for the United States Department of Energy for other purposes including
supercomputer,
nuclear fusion and
particle accelerator research,
and directs the United States Department of Commerce to establish $10 billion worth of research hubs
in post-industrial, mostly rural economies.
=====================================================================================
Passage
.jpg)
===============================================
President
Joe Biden
signing the bill into law on the
South Lawn
of the White House on August 9, 2022
July 27, 2022 Senate vote by state
Two yeas
Yea and not voting
Yea and Nay
Two Nays
Nay and not voting
