Article updated at 5:50 p.m
In the trade war with China, the aspired goal of sovereignty of the leading economic power USA is not only to secure the supply of its industry with components and thus the relocation of industrial capacities on American soil, but also to boost all scientific research programs upstream in order to maintain its technological lead .
Electronic components, also known as semiconductors, are at the heart of all modern electronics and power a large part of the products manufactured, especially the most sophisticated ones. And during the pandemic, particularly as industrial equipment got back on the road, demand for these components exploded, causing global shortages exacerbated by the closure of Chinese factories amid the Covid resurgence.
Additionally, according to the Joe Biden administration, these problems in supplying components found in both smartphones and helicopters have fueled runaway inflation in the country.
In particular, they slowed down the production of new cars last year and drove up prices in the automotive industry.
The United States’ reliance on factories located primarily in Asia also poses a national security threat, as many military devices run on these chips, the government notes.
52 billion subsidies for American industrialists
It is therefore the whole purpose of the Chips and Science Act, that massive plan to support the American semiconductor industry, hatched by the Biden administration, to make the country less dependent and more competitive with China. .
After being given the go-ahead by the Senate and House of Representatives in the last week of July, the Chips and Science Act will release $52.7 billion in subsidies for manufacturing and research and development in the industry.
The law eventually provides $39 billion in aid to encourage companies to manufacture locally and $13 billion for research labs.
A promulgation of the Chips and Science Act with great fanfare
After the vote of Congress, this plan will go into effect soon. Surrounded by the elite of the American semiconductor industry, US President Joe Biden signed the Chips and Science Act on Tuesday. The signing ceremony was attended by CEOs from Micron, Intel, Lockheed Martin, HP and Advanced Micro Devices, as well as executives from the automotive industry, unions, various governors and representatives.
accelerate investments
The Biden administration believes adoption of the text will boost investment. She cites the example of Micron, which has announced it will invest $40 billion in the manufacture of memory chips, which will increase the US market share in this particular area of semiconductors from 2% to 10%.
The investment tax credit will occupy a large spot in the system, as the new law envisages it reaching 25% for chip fabs, totaling an estimated $24 billion.
Several manufacturers have already indicated that they will use these funds to build factories in Ohio or Indiana.
And another $200 billion for scientists
And that’s not all. In fact, it’s only the first salvo as, to compete with China, another $200 billion will be injected over ten years to boost American scientific research. Congress has yet to pass legislation to fund these investments.
The Chinese embassy in Washington has strongly opposed this plan, recalling the “Cold War mentality”.
(with Portal and AFP)