(NewsNation) — The Biden administration plans to invest billions in the American semiconductor industry in a bid to strengthen domestic supply chains.
The White House announced Monday a preliminary deal with chip manufacturer GlobalFoundries to invest $1.5 billion in domestic computer chip production in New York and Vermont. The move comes as the administration seeks credit for economic success in anticipation of what will likely be a close 2024 presidential election.
The investment will drive advancements in communication, health care, military systems and clean energy — positioning the United States to compete with China.
The funding for this initiative stems from the CHIPS and Science Act, passed by Congress in 2022, to fight a major chip shortage exacerbated by the coronavirus pandemic. This investment not only strengthens the U.S. position to compete with China, a major rival in the technology sector, but also supports the production of semiconductors crucial for technologies like electric vehicles, smartphones, satellites and backup cameras.
The boost into U.S. chips is expected to expand chip-making facilities and create 1,500 manufacturing jobs and 9,000 construction jobs over the next 10 years. Additionally, $10 million will be allocated toward developing future workers through educational workforce training.
The CHIPS Act has allocated $39 billion for grants aimed at chip manufacturing projects and includes loans and tax credits. However, it may take years before subsidized factories start producing chips made in America, despite the funds being distributed.
The timeline for the extra funding to help boost the U.S.-made chip supply remains uncertain. However, in the longer term, it could result in lower prices for electronics for Americans.
