Biden signs chip investment bill to compete with China

The $52.7 billion subsidy law for U.S. chipmakers aims to "strengthen U.S. manufacturing, supply chains, and national security"indicated in the White House Joe Biden

US President Joe Biden signed a bill to provide $52.7 billion in subsidies for semiconductor manufacturing and research. The law should make the US more competitive with CHINA in this area, the White House press office said.

“The future will be created in America,” Biden said at the signing of the bill, calling the measure “a once-a-generation investment in America itself” (quoted by REUTERS). The signing was attended by executives from Micron, Intel, Lockheed Martin, HP and Advanced Micro Devices.

According to the White House, the new law is aimed at "strengthening American manufacturing, supply chains and national security, and will promote investment in research and development, science and technology."

“America invented the semiconductor, but today produces about 10% of the world's supply - and none of the most advanced chips. Instead, we rely on East Asia, which accounts for 75% of global production. The Chips and Science Act will open up additional hundreds of billions of dollars to private investment in semiconductors across the country, including manufacturing needed for national defense and critical sectors.

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Parallel to the passage of the bill, Micron announced a $40 billion investment in chip manufacturing that will create up to 40,000 new jobs in the US. Qualcomm and GlobalFoundries announced a new partnership that includes a $4.2 billion investment in chip manufacturing and expansion of GlobalFoundries' New York facility.

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At present, Taiwan's Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea's Samsung are the leading semiconductor manufacturers in the world. The first occupies 54% of the market, the second - 17%.

In July, BLOOMBERG reported that for 2021, chipmakers in China posted the largest growth within the industry compared to other countries. The agency calculated that 19 of the 20 fastest growing chipmakers in the world over the past four quarters were from China, compared with eight in the same period last year.

Bloomberg noted that the rise in numbers demonstrates how tensions between China and the United States are transforming the semiconductor manufacturing industry. In 2020, Washington began to restrict the sale of American technology to Chinese companies, which curbed their growth, but at the same time stimulated production. As a result, large Western companies became interested in Chinese manufacturers. For example, at the end of March, APPLE began considering the Chinese company Yangtze Memory Technologies as a possible supplier of flash memory for its iPhones.

Chip shortages and production cuts at major companies have also worked into the hands of Chinese companies. SMIC and Hua Hong Semiconductor, the industry's largest players, have been able to keep their factories in Shanghai almost fully occupied despite the fact that the covid-19 pandemic has paralyzed many factories and supply chains around the world, according to Bloomberg.