In this article, SIA highlights the impact of the CHIPS and Science Act on America’s economy, job creation, national security, supply chain resilience and technology leadership.
By enacting the CHIPS and Science Act in August 2022, policymakers in Washington took an historic step toward attracting investment in semiconductor production and innovation in the US. While the new law must still be implemented effectively and efficiently to realize its potential, it has already sparked private investments in the US that will strengthen the economy, job creation and supply chain resilience.
From the time the CHIPS Act was introduced in the Spring of 2020 through the months following its enactment, companies in the semiconductor ecosystem announced dozens of projects to increase manufacturing capacity in the US. Some projects began in anticipation of CHIPS Act funding and relying on policymakers’ commitment to follow through on such funding, while others moved forward following enactment of the legislation.
Ninety new semiconductor ecosystem projects have been announced across the US, including the construction of new semiconductor manufacturing facilities (fabs), expansions of existing sites and facilities that supply the materials/equipment used in chip manufacturing.
Nearly $450 billion in private investments have been announced across 28 states to increase domestic manufacturing capacity, while 58,000 new high-quality direct jobs have been announced in the semiconductor ecosystem as part of the new projects, which will support hundreds of thousands of additional jobs throughout the broader US economy.
These new projects cover a range of activities needed to bolster the US chip ecosystem, including new, expanded or upgraded fabs in various semiconductor segments (eg advanced logic, memory, analog and legacy chips), semiconductor equipment facilities, and facilities to produce key materials used in the chip manufacturing process.
Increased fab construction spurs investments by suppliers of materials, chemicals and equipment. As a result, companies that supply semiconductor manufacturing equipment and the materials used in the production of chips—including high-purity chemicals, specialty gases and wafers—announced plans to invest in several facilities to support increased domestic manufacturing capacity.
The total impact of the new fabs, expansion of existing fabs and equipment/materials supplier projects amount to nearly $450 billion in company investments and the creation of approximately 56,000 jobs throughout the US semiconductor supply chain. Job creation in this sector supports jobs throughout the broader US economy.
In fact, a 2021 SIA-Oxford Economic study found that for each US worker directly employed by the semiconductor industry, an additional 5.7 jobs are supported in the wider US economy. In addition to the Commerce grants, the CHIPS Act also includes the ‘Advanced Manufacturing Investment Credit’ for semiconductor manufacturing facilities and facilities that produce semiconductor manufacturing equipment. Taken as a whole, these incentives are expected to generate significant investment in the semiconductor ecosystem in the US, and both are sorely needed to close the significant cost gap between the US and global competitors.