Here’s how the US “CHIPS-plus” bill to counter China can be a game-changer


The United States, which is “on the brink of recession”, has spared no effort to revive its manufacturing industry in order to create a balance between supply and demand. In an effort to encourage the semiconductor industry to invest in the United States, the Senate passed a bill (Industrial Policy Bill), which lawmakers called a “game changer.”

Bill dubbed ‘CHIPS-plus’ provides a whopping $280 billion, which ultimately aims to attract tech companies with grants, tax credits and other measures . The legislation also directs Congress to dramatically increase spending on high-tech research programs that lawmakers say will help the country remain economically competitive for decades to come.

President Biden calls the bill a ‘work machine’

Proponents of the bill say if passed in both houses, it would ensure an uninterrupted supply of semiconductors that power automobiles, computers and other devices. Additionally, with the advancements in technology, manufacturers of lethal weapons are also using semiconductors for better and more accurate impacts.

Although U.S. President Joe Biden and his lawmakers called the bill a “work machine,” opposition leaders disputed that claim and said the bill would increase federal deficits by about $79 billion. dollars over 10 years.

“For decades some ‘pundits’ have said we need to ditch manufacturing in America. I never believed it. Manufacturing jobs are back. Thanks to this bill, we’re going to have even more of them. The House should quickly pass it and send this bill to my office,” Biden noted.

US lags behind China in semiconductor manufacturing

During the debate, Democrats did their best to call the bill the most “nationalistic” and “jobs-focused” bill. However, several reports suggest that the main purpose of the bill may be to counter China’s growing authority in the semiconductor industry.

According to Senator Todd Young, the Chinese government plans to win the artificial intelligence race, noting its optimistic future. He acknowledged that “Beijing is on track to achieve its goals.”

“Unfortunately, we are not in control of a range of important technologies. China is,” he said, adding that the United States has “a chance to move us back in the right direction and to put America back in a position to win the Game.”

Young explained that the bill provides more than $52 billion in subsidies and other incentives for the semiconductor industry as well as a 25% tax credit for companies that invest in semiconductor factories. chips in the country. In addition, the bill intends to call for increased spending on various research programs that would total approximately $200 billion over 10 years.

The United States tries to close the gap

Notably, for decades, China has beaten other nations in the semiconductor market as the leading chipmaker. Intel, a major chipmaker, derives much of its annual revenue from the industries it has established in China’s industrial zones. In addition, cheap labor costs and China’s “friendly” ties with other countries have pushed its market on the path to generating more and more profits.

However, the COVID-19 pandemic and subsequent lockdown hampered the supply chain and as a result, semiconductor prices hit an all-time high globally. Some companies have even been forced to shut down operations in China, citing Beijing’s zero COVID policy. Apprehending the opportunity, the United States, with this bill, will try to encourage companies to invest in Washington.

Moreover, experts have noted that the Biden administration, by introducing this bill, is trying to contain the surge in inflation and unemployment in the country.

(Picture: AP)


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