# Biden signs bill to boost U.S. chips, compete with China
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-09
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: President Biden signs $52.7B chip bill to boost US tech
Meta Description: President Biden signed a landmark bill to provide $52.7 billion in subsidies for U.S. semiconductor production, aiming to make America more competitive with
URL: https://financedigest.com/biden-signs-bill-to-boost-u-s-chips-compete-with-chinahtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-08-09t152700z1lynxmpei780r5rtroptp4usa-china-chips-1736815498368-compressed.jpg)

By David Shepardson and Jeff Mason

WASHINGTON (Reuters) -President Joe Biden on Tuesday signed a landmark bill to provide $52.7 billion in subsidies for U.S. semiconductor [production and research and to boost](https://www.financedigest.com/4-tips-for-creating-a-calm-workspace-to-boost-productivity.html "4 tips for creating a calm workspace to boost productivity") efforts to make the United States more competitive with China’s science and technology efforts.

The future is going to be made in America,” Biden said, calling the [measure “a once-in-a-generation investment in America](https://www.financedigest.com/new-office-expansion-enables-vaisala-to-accelerate-growth-in-industrial-and-environmental-measurements-businesses-professional-services-and-customer-support-the-new-office-will-cater-for-all-vaisala.html "New office expansion enables Vaisala to accelerate growth in industrial and environmental measurements businesses, professional services and customer support. The new office will cater for all Vaisala’s customers in the Latin America region.") itself.

[Biden touted investments that chip](https://www.financedigest.com/exclusive-biden-to-hit-china-with-broader-curbs-on-u-s-chip-and-tool-exports.html "Exclusive: Biden to hit China with broader curbs on U.S. chip and tool exports") companies are making even though it remains unclear when the U.S. Commerce Department will write rules for reviewing [grant awards and how long it will take to underwrite projects](https://www.financedigest.com/amazon-grants-1-5-million-euros-to-dutch-seaweed-farm-project.html "Amazon grants 1.5 million euros to Dutch seaweed farm project").

Some Republicans joined [Biden on the White House lawn to attend](https://www.financedigest.com/biden-tells-britains-king-charles-the-first-lady-will-attend-coronation.html "Biden tells Britain’s King Charles the first lady will attend coronation") the signing of the chips bill that was years in the making in Congress.

The [chief executives](https://www.financedigest.com/exotix-draws-sberbanks-us-chief-executive-in-triple-hire-to-extend-global-capabilities.html "Exotix Draws Sberbank’s US Chief Executive in Triple Hire to Extend Global Capabilities") of Micron , Intel, Lockheed Martin, HP and Advanced Micro Devices attended the signing as did governors of Pennsylvania and Illinois, the mayors of Detroit, Cleveland and Salt Lake City, and lawmakers.

The [White House said the bill’s passage was spurring new chip investments](https://www.financedigest.com/camradata-publishes-responsible-investing-roundtable-the-metric-for-success-a-new-white-paper-for-investors-and-asset-managers.html "CAMRADATA publishes ‘Responsible Investing Roundtable – ‘The metric for success?’ – a new white paper for investors and asset managers"). It noted that Qualcomm on Monday agreed to buy an additional $4.2 [billion in semiconductor chips](https://www.financedigest.com/intel-wants-5-billion-more-in-german-subsidies-for-chip-plant-bloomberg-news.html "Intel wants billion more in German subsidies for chip plant – Bloomberg News") from GlobalFoundries’ New York factory, bringing its total commitment to $7.4 billion in purchases through 2028.

The White House also touted Micron announcing a $40 billion [investment in memory chip manufacturing](https://www.financedigest.com/uk-becoming-less-attractive-for-investment-manufacturers-warn-2.html "UK becoming less attractive for investment, manufacturers warn"), which would boost U.S. market share from 2% to 10%, an investment it said was [planned with “anticipated grants” from the chips bill](https://www.financedigest.com/eus-planned-reforms-aim-to-better-protect-power-bills-from-market-swings.html "EU’s planned reforms aim to better protect power bills from market swings").

Progressives argued the [bill is a giveaway to profitable](https://www.financedigest.com/jd-sports-sees-bills-free-young-shoppers-boosting-profits.html "JD Sports sees bills-free young shoppers boosting profits") chips companies that previously closed U.S. plants, but Biden argued Tuesday “this law is not handing out blank checks to companies.”

The legislation aims to alleviate a [persistent shortage that has affected everything from cars](https://www.financedigest.com/britains-car-output-drops-6-as-supply-woes-persist.html "Britain’s car output drops 6% as supply woes persist"), weapons, washing machines and video games. Thousands of cars and trucks remain parked in southeast Michigan awaiting chips as the shortage continues to [impact automakers](https://www.financedigest.com/covid-19-impact-could-hit-japanese-automakers-output-in-oct.html "COVID-19 impact could hit Japanese automakers’ output in Oct").

A rare major foray into U.S. industrial policy, the bill also includes a 25% [investment tax credit](https://www.financedigest.com/credit-agricole-launches-china-ma-and-investment-banking-business.html "Credit Agricole launches China M&A and investment banking business") for chip plants, estimated to be worth $24 billion.

The legislation authorizes $200 billion over 10 [years to boost](https://www.financedigest.com/crop-merchant-louis-dreyfus-gets-profit-boost-in-volatile-year.html "Crop merchant Louis Dreyfus gets profit boost in volatile year") U.S. scientific research to better compete with China. Congress would still [need to pass separate appropriations legislation to fund those investments](https://www.financedigest.com/weighing-up-buy-now-pay-later-what-you-need-to-know-before-you-invest.html "Weighing up Buy Now, Pay Later: What you need to know before you invest").

[China had lobbied against the semiconductor](https://www.financedigest.com/dutch-responds-to-us-china-policy-with-a-plan-to-curb-semiconductor-tech-exports.html "Dutch responds to US China policy with a plan to curb semiconductor tech exports") bill. The Chinese Embassy in Washington said China “firmly opposed” it, calling it reminiscent of a “Cold War mentality.”

Biden noted the United [States needs chips for key](https://www.financedigest.com/inflation-in-key-german-states-eases-for-second-month.html "Inflation in key German states eases for second month") weapons systems like Javelin missiles. “It’s no wonder the Chinese Communist Party actively lobbied U.S. [business against this bill,”](https://www.financedigest.com/uks-sunak-to-halve-support-that-helps-businesses-pay-fuel-bills-the-times.html "UK’s Sunak to halve support that helps businesses pay fuel bills -The Times") Biden said.

Many U.S. lawmakers had said they normally would not support hefty subsidies for private [businesses but noted that China](https://www.financedigest.com/lighting-maker-signify-cuts-2022-outlook-again-on-china-business-lighting.html "Lighting maker Signify cuts 2022 outlook again on China, business lighting") and the European Union had been awarding billions in incentives to their chip companies. They also cited national security risks and huge global [supply chain](https://www.financedigest.com/mercedes-benz-and-microsoft-collaborate-on-supply-chain-data-platform.html "Mercedes-Benz and Microsoft collaborate on supply chain data platform") problems that have hampered global manufacturing.

(Reporting by David Shepardson and Jeff Mason; Editing by Bradley Perrett and Lisa Shumaker)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---