Biden admin announces plan for $50 bn investment in chips

Washington: The Biden administration has announced it will invest $50 billion in building up the domestic semiconductor industry to counter dependency on China, as the US produces zero and consumes 25 per cent of the world's leading-edge chips vital for its national security. President Joe Biden last month signed a $280 billion CHIPS bill to boost domestic high-tech manufacturing, part of his administration's push to boost US competitiveness over China.

US Commerce Secretary Gina Raimondo on Tuesday told reporters at the White House that the Department of Commerce plans to implement the $50 billion in CHIPS. The department is aiming to begin soliciting applications for the funding from companies no later than February, and it could begin disbursing money by next spring, Raimondo said.

"This past year, we saw the impact of the chip shortage on American families when car prices drove a third of inflation because of lack of chips, factory workers were furloughed, household appliances were often unavailable, all because of a lack of semiconductors," Raimondo said. "And as our economy and military become more reliant on technology, it's that much more essential that we develop a strategy with values, outcomes, and structures that enable us to plan for an economy and manufacturing infrastructure that positions us to compete today and into the future," she added.

According to Tuesday's decision, the massive $50 billion funding aims at establishing and expanding domestic production of leading-edge semiconductors in the United States. "Today, the United States consumes more than 25 per cent of the world's leading-edge chips and produces zero of those chips," she said. "We want to build a sufficient and stable supply of mature node semiconductors. We consume 30 per cent, and produce 13 per cent. We need to fix that," she said.