{"id":86898,"date":"2022-12-16T12:41:00","date_gmt":"2022-12-16T16:41:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=86898"},"modified":"2022-12-30T16:13:03","modified_gmt":"2022-12-30T20:13:03","slug":"the-chips-act","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/the-chips-act\/","title":{"rendered":"How the CHIPS Act Can Save U.S. Chip Manufacturers"},"content":{"rendered":"\n

What is the CHIPS (Creating Helpful Incentives to Produce Semiconductors and Science) Act? How will it help U.S. manufacturers? <\/p>\n\n\n\n

Chips are essential to all the tech we rely on every day, from our smartphones to our cars. Once upon a time, the U.S. produced those chips, but today they mostly come from Taiwan or China\u2014however, the CHIPS Act may reverse that trend.<\/p>\n\n\n\n

Read on to learn more about the CHIPS Act and the state of the chip industry today.<\/p>\n\n\n\n\n\n\n\n

The U.S. Falls Behind in the Chip Industry<\/h2>\n\n\n\n

The U.S. has fallen behind in its leadership of the chip industry because Asian countries have invested more in incentivizing the industry through tax policy. However, the recently passed CHIPS (Creating Helpful Incentives to Produce Semiconductors and Science) Act seeks to reverse that trend with a $52 billion investment.<\/p>\n\n\n\n

The chip industry is intricate, and the U.S. still leads some of its components, such as the software and machinery used to design and manufacture chips. In fact, the U.S. is not shy about leveraging its leadership in that area to shut China out of the chip industry, as it has done recently with the sanctions President Biden announced against China. These sanctions block Chinese companies from accessing the American technology they need to produce semiconductor chips.<\/p>\n\n\n\n

But despite the United State\u2019s leadership of that piece of the chip puzzle, the Taiwan Semiconductor Manufacturing Company (TSMC) is the indisputable leader in chip manufacturing, producing 90% of the world\u2019s chips. A decade ago, that leader was Intel, but it has fallen dramatically behind in technological innovation. <\/p>\n\n\n\n

As mentioned previously, part of the reason the U.S. has fallen behind in leadership of the chip industry is that Asian countries have invested more in incentivizing the industry through tax policy. This has made manufacturing a more profitable business in that region of the world.<\/p>\n\n\n\n

What Does the CHIPS Act Promise? And Where Does it Fall Short?<\/h3>\n\n\n\n

The recently passed CHIPS Act seeks to reverse that trend with a $52 billion investment in the semiconductor industry by filling the funding gap in the “valley of death<\/a>” between research and mature commercial technologies, both of which are already successful in the U.S.<\/p>\n\n\n\n

The act includes:<\/p>\n\n\n\n