CHIPS for America Act Is What the U.S. Needs

CHIPS for America Act Is What the U.S. Needs

By The Fatty Fish Editorial Team - July 30, 2022

The Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act was introduced in 2020 to address the growing concern over U.S. dependence on foreign semiconductor manufacturing. The bill aims to increase funding for semiconductor R&D, incentivize domestic production, and strengthen partnerships between the government and the private sector. The need for this legislation is driven by the increasing importance of semiconductors in the modern economy, from smartphones and laptops to advanced medical equipment and autonomous vehicles. However, the U.S. has fallen behind in semiconductor manufacturing, with most of the production taking place in Asia.

The CHIPS for America Act will help reverse this trend by providing $37 billion in funding to support domestic semiconductor R&D, as well as establish manufacturing and testing facilities. This investment will enable the U.S. to develop advanced semiconductor technologies, strengthen its supply chains, and maintain its position as a global leader in innovation. Here are a series of opinion pieces we found of interest relating to the CHIPS Act.

The CHIPS Act: Far From Perfect, but Still Very Good

In an opinion piece for the American Enterprise Institute, “The CHIPS Act: Far from Perfect, but Still Very Good,” Klon Kitchen, nonresident senior fellow at the American Enterprise Institute, discusses the CHIPS Act, which is aimed at addressing the semiconductor shortage in the U.S. Although the act is not perfect, he argues that it is a step in the right direction as it provides funding for semiconductor manufacturing and research, promotes international cooperation, and incentivizes companies to build new foundries in the U.S. CHIPS also helps the U.S. go on offense, incrementally improving the ability to shape the industry as a whole and to constrain semiconductor manufacturing in China. However, Kitchen acknowledges that more needs to be done to address the root causes of the semiconductor shortage, such as supply chain vulnerabilities and geopolitical tensions. Read the full article on American Enterprise Institute.

Semiconductor Dependency Imperils American Security

In an opinion piece for The Wall Street Journal, “Semiconductor Dependency Imperils American Security,” Graham Allison, a professor of government at Harvard, and Eric Schmidt, former executive chairman of Google and its successor, Alphabet Inc., discuss the increasing U.S. semiconductor dependency on foreign countries and the potential security risks associated with it. The Taiwan Semiconductor Manufacturing Company (TSMC) manufactures 92% of the advanced semiconductors necessary for every smartphone, laptop and ballistic missile. U.S. firms such as Nvidia, Qualcomm and Apple outsource almost all of their manufacturing to Taiwan. Meanwhile, China is on track to overtake Taiwan as the world’s largest manufacturer of chips as soon as 2025.

The authors highlight the challenges faced by U.S. chip manufacturers and examine the government’s efforts to support domestic chip production. They emphasize the need for a long-term strategy to reduce reliance on foreign countries and secure America’s semiconductor supply chain. Read the full article on The Wall Street Journal.

The CHIPS for America Act: Why It Is Necessary and What It Does

In an opinion piece for the Center for Strategic and International Studies, “The CHIPS for America Act: Why It is Necessary and What It Does,” Gregory Arcuri, a research intern with the Renewing American Innovation Project at the Center for Strategic and International Studies, explores what problems the CHIPS for America Act seeks to address, what programs it authorizes, and what is preventing Congress from following through with funding.

Policymakers have increasingly recognized the geopolitical and economic risks of the growing concentration of chip fabrication overseas, primarily in Taiwan and Korea. Numerous strategic technologies such as quantum computing and artificial intelligence rely on advanced semiconductors. Many U.S. policymakers and lawmakers increasingly believe that American economic and strategic competitiveness requires a secure and significant domestic chip fabrication capacity. The CHIPS for America Act authorizes several programs to both expand U.S. semiconductor fabrication capacity and to support continued R&D of advanced chips. Read the full article on Center for Strategic and International Studies.

Disclosure: Fatty Fish is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

The Fatty Fish Editorial Team

The Fatty Fish Editorial Team includes a diverse group of industry analysts, researchers, and advisors who spend most of their days diving into the most important topics impacting the future of the technology sector. Our team focuses on the potential impact of tech-related IP policy, legislation, regulation, and litigation, along with critical global and geostrategic trends — and delivers content that makes it easier for journalists, lobbyists, and policy makers to understand these issues.