Chip companies hailed President Biden’s call during the State of the Union on Tuesday for investments in chip technology, a topic the Semiconductor Industry Association and its members have have been pushing for more than a year.
The president called for the Senate and House to reach agreement on legislation calling for $52 billion in CHIPS Act investments, which is designed to add incentives for chip research, design and manufacturing.
“We need to level the playing field with China and other competitors,” Biden said.
The president tied his chip funding remarks with Intel’s plan to build a $20 billion semiconductor mega site in Ohio, noting that It will support 10,000 new jobs, with average salaries of $135,000.
The president introduced Intel CEO Pat Gelsinger sitting in the gallery, noting he had told Biden Intel is ready to increase the $20 billion investment to $100 billion for one of the biggest investments in manufacturing in American history.
“All they’re waiting for is for you to pass this bill,” Biden said. “Send it to my desk and I’ll sign it and we’ll really take off in a big way.”
Gelsinger noted the president’s acknowledgement and stood in his seat to a standing ovation from a bipartisan group of elected officials. The location of the fabs in Ohio offered the president a chance to riff on the value of having manufacturing jobs located in the U.S.
Biden referred to the Bipartisan Innovation Act in his remarks, which has been called the U.S. Competition and Innovation Act (USICA) passed by the Senate in June 2021. It contained the $52 billion pricetage, the same amount passed by the House in the America COMPETES Act of 2022. Differences in the bills must still be reconciled and passed by both houses before being signed by the president.
A separate investment tax credit in the FABS Act is also favored by SIA and others. SIA has argued the $52 billion will spur billions in private investments.
Semiconductor manufacturing in the U.S. has slipped to 12% of the world’s production in recent years, down from 37% in 1990, which SIA claims is largely due to substantial incentives offered by governments outside the U.S. Federal investment in chip research has been flat as well, and the SIA said private sector spending on chip R&D reached nearly $40 billion in 2019, compared to just $1.7 billion on core chip-specific R&D.
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