Over two years ago, Congress passed the CHIPS and Science Act, a huge step toward reviving America’s semiconductor industry — and its success is evident. The law, which President Joe Biden signed in August 2022, was designed specifically to guard the country’s national and economic security and return supply chains to the U.S.

It provides for investments in domestic semiconductor production (also called chips), research and development (R&D), tech hubs, and the STEM workforce. The bill also supports the U.S.’s goal of achieving a technological advantage over China. Since its inception, not only has the Biden-Harris Administration given the CHIPS Act funding, but private investors have funneled over $400 billion worth into this endeavor. 

The CHIPS and Science Act

To date, the CHIPS Program Office, which sits under the U.S. Department of Commerce (DOC), has announced over $30 billion in proposed private-sector investments, including 23 projects across 15 states. For example, 16 brand-new semiconductor manufacturing facilities are expected to generate over 115,000 jobs in both manufacturing and construction. 

This CHIPS funding includes $1.5 billion for GlobalFoundries, $162 million for Microchip Technology Inc., $35 million for BAE Systems Electronic Systems, and $8.5 billion for Intel, among others. The goal is to allocate the remaining funds to CHIPS grantees by the end of 2024. 

The CHIPS & Science Act: Year One

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This legislation allocated nearly $53 billion to bring semiconductor manufacturing back to the U.S., create quality jobs, boost local economies, and safeguard national security. The impact of this investment could already be seen after the very first year, showing promise that the U.S. will once again become a global leader in semiconductor manufacturing.

Notable projects include the expansion of semiconductor facilities by companies such as Intel and GlobalFoundries. For instance, Intel’s announcement of a new $20 billion manufacturing plant in Ohio and GlobalFoundries’ expansion in New York show some of the real progress made.

According to Don Graves, the U.S. Deputy Secretary of Commerce, in its first year, the Act generated more than 460 statements of interest from semiconductor companies seeking to produce semiconductors in the U.S.

The CHIPS & Science Act: Year Two

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In February 2024, DOC’s Secretary, Gina Raimondo, revealed that private companies had announced nearly $200 billion in semiconductor production investments since the Act’s signing. Over 50 community colleges have introduced or expanded programs to support the semiconductor industry. 

Interest in CHIPS funding has surged, with over 600 proposals submitted. This far exceeds the $28 billion allocated for creating helpful incentives in manufacturing out of the program’s $39 billion budget. However, the demand for funds, totaling over $70 billion, means only a small percentage of proposals will get any of this support.

In addition, the first R&D facilities under the CHIPS for America program were announced, bringing the U.S. one step closer to domestic semiconductor manufacturing success.

The CHIPS & Science Act: Year Three

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Now, into the third year since President Biden signed the CHIPS Act into law, the federal government has continued supporting workforce development and semiconductor supply chains through funding and encouragement for the private sector to invest, too. The Department of Defense is a more recent example of a body that pumped more money into semiconductor manufacturing in November, providing $160 million, specifically for microelectronics.

Earlier in October, Biden also officialized a new law that loosened the environmental restrictions on semiconductor manufacturers. It’s another bipartisan law that would allow specific groups of semiconductor companies and manufacturers to avoid environmental reviews, leading to the quicker construction of new manufacturing facilities and a faster route to production. However, some day it’s risky and that hazardous chemicals and unsustainable business practices are much more likely to go unchecked. 

There were advancements on tax exemptions, too. Companies have to spend hefty amounts for the right equipment, facilities, and folks for manufacturing jobs. Rather than further investments (which are already occurring) to help unburden manufacturers, several subsidies and exemptions were improved or introduced. One of those was a new rule for the 48D credit, which meant chip manufacturers would be included in the sectors that could get 25% back. 

Election Impact on the Chips and Science Act 

With the election happening in 2024, CHIPS funding has been a hot topic as well through this lens. Although it was bipartisan, CHIPS has received criticism from president-elect Donald Trump. There were questions about if he would continue the CHIPS Act and if he would reverse what has happened once he entered office in early 2025. 

As of right now, experts predict that he’ll maintain the newly-forming domestic semiconductor ecosystem and continue the push for America to gain and maintain technological leadership in this sector. We’ll see more affirmative developments over the next year.

Domestic Semiconductor Manufacturing

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Semiconductors are a crucial part of our daily lives, powering everything from smartphones to cars and medical devices. They are also important to the development of technologies that are set to shape the future, like artificial intelligence (AI), biotechnology, and clean energy.

By investing in CHIPS and bringing semiconductor supply chains back to the U.S., the country is positioning itself as a leader in the global semiconductor market. Currently, America is on track to become home to all five of the world’s top logic and DRAM semiconductor manufacturers. While the most advanced chips are currently being made in places such as Taiwan and China, 

No other economy globally hosts more than two such manufacturers, so this is quite the achievement. The U.S. aims to produce nearly 30% of the world’s chips by 2032 — which is a stark difference from the 0% it produced just a few years ago.

New R&D Facilities and NSTC Initiatives

On July 12, 2024, the Biden-Harris Administration, in collaboration with Natcast, the operator of the National Semiconductor Technology Center (NSTC), announced the selection process for the first three R&D facilities funded by the CHIPS and Science Act. 

These facilities include an Advanced Packaging Piloting Facility (NAPMP) that will, as its name suggests, focus on clever packaging technologies for semiconductor components. 

Another is the Extreme Ultraviolet (EUV) Center, which will specialize in EUV lithography to produce better-performing semiconductor chips with smaller features. The third is the NSTC Administrative and Design Facility, which will handle the NSTC’s administrative and design functions.

American Innovation and Support for Workers

Additionally, the Act is helping STEM education and workforce development by ensuring that minority-serving institutions and other emerging research institutions are included in the growth of this critical sector.

For example, the Act has funded new programs at historically Black colleges and universities (HBCUs) like Howard University and Spelman College, aiming to increase student participation in semiconductor R&D

In underserved communities, the Act has supported the establishment of new tech hubs and training programs, such as the expansion of community college programs in regions like Detroit and Phoenix. These initiatives are helping to equip local talent with the skills needed for high-tech jobs, boost workforce development, and drive economic growth in areas that have traditionally faced barriers to entry in the tech sector.

National Science Foundation Role

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The CHIPS and Science Act is closely linked to the National Science Foundation (NSF) because the Act focuses on bringing semiconductor chip manufacturing back to the U.S. and furthering fundamental research and technology.

The CHIPS Act strengthens collaboration between government, industry, and academia to grow domestic production, improve supply chain security, and carry out advanced technological research. The NSF plays an important role by funding this research in semiconductor technologies and partnering with educational institutions to help the cause. 

National Security and Economic Safety

Another advantage of bringing semiconductor manufacturing back to the U.S. is the increased economic and national security that comes with it. When manufacturing is taking place within America, it’s easier to control and there are fewer global influences. 

Not only does the CHIPS and Science Act bring innovative ideas and product creation back to U.S. soil—which in itself is safer from the government’s perspective—but it discourages practices that could lead to potential threats. In fact, the government even has several “guardrails” in place that restrict how far companies can take their semiconductor investments and enter into deals with “countries of concern” and place restrictions on exports. 

CHIPS and Science Act, Over 2 Years In: Conclusion

The CHIPS and Science Act is an important initiative that will help America’s semiconductor renaissance. With continued investment and support, the U.S. is on its way to becoming a dominant force in the global semiconductor landscape, creating quality jobs and enhancing economic security for all Americans. 

The next decade promises even more growth and development, positioning the U.S. as a hub of semiconductor innovation and manufacturing excellence. With its vast semiconductor manufacturing capacity, it only makes sense to bring it home.