U.S. chip bill takes effect "to ensure U.S. military access to cutting-edge semiconductor supplies"
The U.S. Department of Commerce said in a statement on Tuesday, February 28, that the Chip Act, which aims to revitalize the U.S. semiconductor industry, has officially entered into force, said U.S. Commerce Secretary Raimondo: The Chip Act aims to maintain U.S. national security and ensure that the U.S. military is supplied with sophisticated semiconductors.
AFP news agency, the U.S. Department of Commerce will begin accepting applications for the $39 billion semiconductor manufacturing grant program at the end of June this year. The "Chip Act" (CHIPS Act), enacted on Tuesday, also aims to provide a 25% investment tax credit for the construction of chip plants in the United States, estimated to be worth a total of $24 billion.
The goal of the chip bill introduced by the United States is to restore the United States in this strategic industry's dominant position, and chip production is currently concentrated in Asia, while South Korean and Taiwanese companies manufacture most of their products in China.
The bill is based primarily on maintaining the national security of the United States, and the goal is to ensure that companies producing the most sophisticated chips are based on U.S. soil, the U.S. Commerce Secretary said at a press conference on Tuesday in Raimondo.
To ensure this, the law establishes a number of criteria for government assistance, including the strategic choice of companies. Companies that receive government subsidies will not be able to make new investments in high-tech areas in "challenged countries" for the next ten years.
The Biden administration is seeking to bring semiconductor manufacturing back to the United States, and the chip bill is a central part of that effort. The success of this initiative will depend on whether the US can achieve its goal of staying ahead of China in the global market.
Under the program, companies seeking grants from the $52 billion U.S. Semiconductor Manufacturing and Research Support Program would have to agree to limit their ability to expand semiconductor production in countries like China.
Companies that win the grants will be required to sign an agreement that, for 10 years after winning the grant, they must limit their ability to expand semiconductor capacity in countries of concern, such as China, and not engage in any joint research or technology licensing with "challenged" foreign entities, as long as it involves sensitive technology, Raimondo said.
Reuters reports that according to the US Department of Commerce, companies that apply for more than $150 million in direct funding grants "will be required to share a portion of any cash flow or earnings that exceed the applicant's estimate by more than an agreed-upon threshold with the US government".
According to the Central News Agency, citing the Wall Street Journal, U.S. Commerce Secretary Raimondo also said in an interview with the Wall Street Journal that the "Chip Act" fosters U.S. semiconductor manufacturing and will allow the U.S. Department of Defense to ensure access to cutting-edge semiconductors produced by subsidized factories, which will also ensure that the U.S. industry can supply the advanced chips needed by the military for modern weapons systems.
According to the report, US military and national security officials have expanded their involvement in related matters, given the rising competition between the US and China, as well as the supply chain weaknesses revealed during the new crown epidemic, which has raised concerns among US policymakers that the country has become overly dependent on imported chips.
The reliance on Taiwan's chip supply is of particular concern to US officials. This is because if there is a military conflict in the Taiwan Strait, it is feared that the supply of advanced semiconductors will be disrupted, which in turn will affect the manufacturing companies that rely on such chips.
In an interview, Raimondo said the chip bill to promote the development of U.S. chips is also a national security measure, because the United States more than 90% of advanced process chips purchased from Taiwan, forming a "national security vulnerability" that can no longer be sustained. She said, "Every piece of sophisticated military equipment, every drone, every satellite, all depend on chips."
AFP news agency, the U.S. Department of Commerce will begin accepting applications for the $39 billion semiconductor manufacturing grant program at the end of June this year. The "Chip Act" (CHIPS Act), enacted on Tuesday, also aims to provide a 25% investment tax credit for the construction of chip plants in the United States, estimated to be worth a total of $24 billion.
The goal of the chip bill introduced by the United States is to restore the United States in this strategic industry's dominant position, and chip production is currently concentrated in Asia, while South Korean and Taiwanese companies manufacture most of their products in China.
The bill is based primarily on maintaining the national security of the United States, and the goal is to ensure that companies producing the most sophisticated chips are based on U.S. soil, the U.S. Commerce Secretary said at a press conference on Tuesday in Raimondo.
To ensure this, the law establishes a number of criteria for government assistance, including the strategic choice of companies. Companies that receive government subsidies will not be able to make new investments in high-tech areas in "challenged countries" for the next ten years.
The Biden administration is seeking to bring semiconductor manufacturing back to the United States, and the chip bill is a central part of that effort. The success of this initiative will depend on whether the US can achieve its goal of staying ahead of China in the global market.
Under the program, companies seeking grants from the $52 billion U.S. Semiconductor Manufacturing and Research Support Program would have to agree to limit their ability to expand semiconductor production in countries like China.
Companies that win the grants will be required to sign an agreement that, for 10 years after winning the grant, they must limit their ability to expand semiconductor capacity in countries of concern, such as China, and not engage in any joint research or technology licensing with "challenged" foreign entities, as long as it involves sensitive technology, Raimondo said.
Reuters reports that according to the US Department of Commerce, companies that apply for more than $150 million in direct funding grants "will be required to share a portion of any cash flow or earnings that exceed the applicant's estimate by more than an agreed-upon threshold with the US government".
According to the Central News Agency, citing the Wall Street Journal, U.S. Commerce Secretary Raimondo also said in an interview with the Wall Street Journal that the "Chip Act" fosters U.S. semiconductor manufacturing and will allow the U.S. Department of Defense to ensure access to cutting-edge semiconductors produced by subsidized factories, which will also ensure that the U.S. industry can supply the advanced chips needed by the military for modern weapons systems.
According to the report, US military and national security officials have expanded their involvement in related matters, given the rising competition between the US and China, as well as the supply chain weaknesses revealed during the new crown epidemic, which has raised concerns among US policymakers that the country has become overly dependent on imported chips.
The reliance on Taiwan's chip supply is of particular concern to US officials. This is because if there is a military conflict in the Taiwan Strait, it is feared that the supply of advanced semiconductors will be disrupted, which in turn will affect the manufacturing companies that rely on such chips.
In an interview, Raimondo said the chip bill to promote the development of U.S. chips is also a national security measure, because the United States more than 90% of advanced process chips purchased from Taiwan, forming a "national security vulnerability" that can no longer be sustained. She said, "Every piece of sophisticated military equipment, every drone, every satellite, all depend on chips."
