Billions of US dollars against China: Biden implements subsidies for the chip industry

Because the necessary chips are missing in production, prices rise and fuel inflation.

Billions of US dollars against China: Biden implements subsidies for the chip industry

Because the necessary chips are missing in production, prices rise and fuel inflation. The United States now wants to take medium and long-term action against dependence on China and Taiwan. Around 53 billion dollars flow into the semiconductor industry, 170 billion into research and development.

In the race with China and Europe, the USA is helping its domestic chip industry with billions in subsidies. President Joe Biden signed the US Chips and Science Act, worth almost $53 billion. The heads of Micron, Intel, Lockheed Martin, HP and AMD, as well as other industry and union representatives, lawmakers and governors were present when Biden signed the law into law.

Details of funding for the next five years have yet to be worked out, but it's clear that the United States also wants to set an example. With the law, the USA wants to reduce its dependency on chip production in Asia. Among other things, there are large production capacities in Taiwan - in view of the tensions with China, US politicians are worried about security of supply.

In addition to direct production support, the USA is therefore investing 170 billion dollars in research, development and for the space agency NASA. This is intended to advance the development of artificial intelligence, quantum computers, manufacturing, 6G communication, and energy and materials research.

Biden told industry officials at the signing: "So many of you have been calling for important investments that are included in this bill for years. (...) You stand for the fact that we are better placed than any other nation in the world to win the economic competition of the 21st century." Car manufacturers and electronics companies in particular are currently suffering from the ongoing shortage of chips. The delivery bottlenecks are also fueling inflation, which has already risen sharply worldwide.

Among others, the industry heavyweight Micron had previously announced that it would invest billions in memory chip production in the USA. By the end of the decade, 40 billion dollars are to be invested in several stages. The company specifically referred to the subsidies from the "Chips and Science Act". 5,000 jobs are to be created at Micron. Qualcomm announced plans to buy additional semiconductors from Global Foundries in New York for $4.2 billion.

It was only in February that the EU Commission launched the European counterpart, the "European Chips Act". Since then, Intel has launched billion-dollar factory projects in Magdeburg, Saxony-Anhalt, and at other European locations.