The Biden administration has allocated $162 million to Microchip Technology to support the production of computer chips within the US. This funding announcement is in line with a 2022 law aimed at revitalising the country’s semiconductor manufacturing industry. According to a report by news agency AP, the incentives, announced by the Commerce Department, include $90 million to enhance a plant in Colorado Springs, Colorado, and $72 million to expand a factory in Gresham, Oregon. These investments will enable Microchip Technology Inc., headquartered in Chandler, Arizona, to triple its domestic production and reduce its reliance on foreign factories.
The majority of the funding will be used for producing microcontrollers, which have various applications in the military, automobiles, household appliances, and medical devices. Government officials anticipate that these investments will create 700 jobs in construction and manufacturing over the next decade.
Importance of this funding for the chip industry in US
Lael Brainard, director of the White House National Economic Council, emphasised the importance of this funding in addressing inflation concerns. Brainard stated, “Semiconductors are a critical component in many goods that are essential to our economy.” She further added that increased chip production in the United States would have mitigated supply issues that caused price hikes in automobiles and washing machines as the country emerged from the COVID-19 pandemic in 2021.
Although the inflation rate has since decreased, the impact of the sudden price increases has affected President Joe Biden’s public approval ratings.
The majority of the funding will be used for producing microcontrollers, which have various applications in the military, automobiles, household appliances, and medical devices. Government officials anticipate that these investments will create 700 jobs in construction and manufacturing over the next decade.
Importance of this funding for the chip industry in US
Lael Brainard, director of the White House National Economic Council, emphasised the importance of this funding in addressing inflation concerns. Brainard stated, “Semiconductors are a critical component in many goods that are essential to our economy.” She further added that increased chip production in the United States would have mitigated supply issues that caused price hikes in automobiles and washing machines as the country emerged from the COVID-19 pandemic in 2021.
Although the inflation rate has since decreased, the impact of the sudden price increases has affected President Joe Biden’s public approval ratings.
In August 2022, President Biden signed the bipartisan CHIPS and Science Act, which allocates over $52 billion to support the development and manufacturing of semiconductors in the United States.
Last December, the Commerce Department announced the first round of grants, providing $35 million to BAE Systems. The funds will be used to expand a factory in New Hampshire that produces chips for military aircraft, including F-15 and F-35 jets.
Government officials expect to announce further funding commitments throughout this year.
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