FACT SHEET: CHIPS and Science Act Will Lower Costs, Create Jobs, Strengthen Supply Chains, and Counter China

In his first year, President Biden implemented an industrial strategy to revitalize domestic manufacturing, create high-paying American jobs, strengthen supply chains, and advance future industries. This approach has led to a historic resurgence in manufacturing, with 642,000 jobs added since 2021. Companies are investing in America again, boosting domestic production and driving economic growth. Construction of new manufacturing facilities has surged by 116% over the past year, reflecting growing confidence in the American economy and workforce.

Signing of the CHIPS and Science Act

Today, President Biden will sign the bipartisan CHIPS and Science Act of 2022 into law, building on this progress by making historic investments to secure America’s technological future. This landmark legislation will strengthen U.S. manufacturing, fortify supply chains, and advance national security by promoting research and development in emerging fields such as nanotechnology, clean energy, quantum computing, and artificial intelligence. The CHIPS and Science Act positions the United States to lead the 21st-century economy while ensuring that American workers and communities benefit from these advancements.

Massive Investment in Semiconductor Manufacturing

Following the passage of the CHIPS and Science Act, companies have announced nearly $50 billion in additional investments in U.S. semiconductor manufacturing, bringing the total business investment to approximately $150 billion since President Biden took office:

• Micron is committing $40 billion to expand memory chip production, creating up to 40,000 new construction and manufacturing jobs. This investment is expected to increase the U.S. global memory chip production share from under 2% to 10% over the next decade.
• Qualcomm and GlobalFoundries are forming a $4.2 billion partnership to expand chip manufacturing in upstate New York. Qualcomm plans to increase U.S. semiconductor production by 50% over the next five years.

Restoring American Leadership in Semiconductor Production

The CHIPS and Science Act will boost U.S. semiconductor research, development, and manufacturing, ensuring American leadership in technologies that power essential systems – from automobiles and household appliances to defense systems. Although the U.S. pioneered semiconductor technology, it now produces only 10% of the global supply and none of the most advanced chips. East Asia accounts for 75% of global production, leaving the U.S. vulnerable to supply chain disruptions. The CHIPS and Science Act will unlock hundreds of billions in private sector investment to restore U.S. leadership and secure essential semiconductor production.

Investing in Science, Technology, and Regional Growth

To maintain U.S. dominance in science and technology, the CHIPS and Science Act will increase federal investment in research and development, which had dropped from 2% of GDP during the 1960s space race to less than 1% by 2020. This law will expand opportunities in science and technology across the country, ensuring that underserved communities benefit from the innovation economy. By fostering inclusive growth, the CHIPS and Science Act will help reduce economic disparities and create opportunities in regions previously left behind.

Ensuring Efficient Implementation of CHIPS Funding

The Biden-Harris Administration is taking immediate action to ensure the effective deployment of CHIPS and Science Act funding:

• Permitting Coordination: A new interagency working group will streamline the permitting process for high-tech manufacturing projects. This group, involving the Council on Environmental Quality, EPA, and the Department of Commerce, will facilitate collaboration between federal, state, and local governments to accelerate project delivery and ensure compliance with environmental standards.
• PCAST Recommendations: The President’s Council of Advisors on Science and Technology (PCAST) has provided recommendations to implement the CHIPS and Science Act, including establishing a national microelectronics training network, fostering innovation by reducing barriers for startups, and developing a “chipset platform” to accelerate innovation at lower costs. PCAST also recommended setting a national semiconductor research agenda focused on achieving groundbreaking advancements such as building the first “petascale supercomputer.”

Key Provisions of the CHIPS and Science Act

✅ Bolstering U.S. Leadership in Semiconductors

The CHIPS and Science Act provides $52.7 billion for semiconductor research, development, and manufacturing, including:

• $39 billion in manufacturing incentives, with $2 billion allocated for legacy chips used in automobiles and defense systems.
• $13.2 billion for R&D and workforce development.
• $500 million for international information communications technology security and semiconductor supply chain activities.
• A 25% investment tax credit for semiconductor manufacturing and related equipment.

Recipients of these funds must demonstrate substantial investments in workers and communities, including providing opportunities for small businesses and disadvantaged communities. Strong guardrails ensure that funds cannot be used for stock buybacks or facilities in China and other countries of concern. Davis-Bacon prevailing wage standards will apply to construction projects funded by CHIPS to support good-paying, union construction jobs.

✅ Promoting U.S. Innovation in Wireless Supply Chains

The CHIPS and Science Act invests $1.5 billion to advance wireless technologies that use open and interoperable radio access networks. This funding will strengthen U.S. leadership in wireless technology and ensure that America remains at the forefront of 5G and future communication innovations.

✅ Advancing Leadership in Emerging Technologies

U.S. leadership in emerging technologies – such as artificial intelligence, biotechnology, and advanced computing – is essential for future economic competitiveness and national security. The CHIPS and Science Act establishes a technology, innovation, and partnerships directorate at the National Science Foundation (NSF) to focus on these fields and accelerate commercialization. It will reauthorize and expand fundamental research at the Department of Energy and the National Institute of Standards and Technology (NIST), ensuring that the United States continues to lead the world in science and engineering.

✅ Catalyzing Regional Economic Growth

The CHIPS and Science Act authorizes $10 billion to create regional innovation and technology hubs nationwide. These hubs will unite local governments, academic institutions, labor unions, and businesses to foster growth in high-wage sectors such as advanced manufacturing, artificial intelligence, and clean energy technology. The bill also establishes a $1 billion RECOMPETE pilot program through the Department of Commerce’s Economic Development Administration to address economic distress and promote long-term job creation in underserved communities.

✅ Expanding STEM Opportunities for All Americans

To ensure a diverse and skilled workforce, the CHIPS and Science Act expands investments in STEM education and workforce development, from K-12 education to community colleges and beyond. These investments aim to equip all Americans, especially those from historically underserved communities, with the skills needed for high-paying, technology-driven jobs.

✅ Driving Equity in STEM and Innovation

The legislation provides funding to expand opportunities at Historically Black Colleges and Universities (HBCUs) and other minority-serving institutions. It also promotes geographic and institutional diversity in research funding and gives agencies the tools to combat sexual and gender-based harassment in the sciences. Through these initiatives, the CHIPS and Science Act ensures that innovation reflects the diversity of America and benefits communities across the nation.