A bill that would give $52 billion in subsidies to U.S. chip makers promises to galvanize domestic production, although it will take time to alleviate a semiconductor shortage that has been delaying satellite projects.
U.S. President Biden is set to sign the bill, dubbed the Chips and Science Act, after it passed House and Senate votes last week.
It comprises $280 billion in total support for America’s manufacturing and technological capabilities.
The legislation aims to boost U.S. competitiveness in the global semiconductor market with grants, tax credits and other incentives in response to China’s growing dominance in the sector.
It also comes as a lack of chips and other spacecraft components during the pandemic have been slowing down satellite projects and increasing costs.
But while there will be a lag between the bill’s approval and when new fabrication facilities can be brought online to improve supply, reducing U.S. dependence on foreign suppliers also has security implications.
Nearly four-fifths of global fabrication capacity was in Asia as of 2019, according to the U.S. Congressional Research Service.
Although the figures show China had 12% of the world’s capacity, the U.S.-based Semiconductor Industry Association said last year that China’s investments in the sector put the country on track to command the largest share of global production by 2030.
