How does the COMPETES Act help semiconductor manufacturing?


The US Congress finally approved the COMPETES Act. The bill aims to boost production and end the microchip shortage crisis.

The US Congress finally approved the COMPETES Act, also known as the Competition Act in China. The law was designed to solve the chip shortage crisis by solving the fundamental problem. The chip shortage has been affecting automakers and the tech industry since the pandemic.

In just 30 years, the United States has gone from being an international leader in semiconductor research, innovation, and exports to lagging behind and dependent on other regions. The majority of chips and semiconductors in use today are made in Taiwan, South Korea and China. Every business today is a digital business. This is in addition to advancements in technology, cloud computing, changes in new automotive technologies, space and healthcare sectors that are pushing the demand for chips to new heights. The industry simply cannot keep up.


Related: Apple faces darkest supply issues in years thanks to chip shortages

The United States House of Representatives passed the America COMPETES Act by a vote of 222 to 210. The law provides $52 billion to boost semiconductor manufacturing in the United States and $45 billion to improve US supply chains and prevent shortages. Additionally, new manufacturing facilities will receive $39 billion in direct subsidies. Beneficial projects include Intel’s new $20 billion plant in Ohio and Taiwan Semiconductor Manufacturing Company’s new $39 billion plant TSMC.

New factories, research and prevention of shortages

Intel semiconductor
Picture via Intel

Congress says the package will accelerate semiconductor production, innovation and research and energize the industry for the future. While the law is not intended to completely cut dependence on Asian regions, it is intended to strengthen American leadership. The bill also contemplates investing in international partnerships and alliances that respect American values.

Over the past 15 years, “America has fallen behind in terms of global leadership in science and innovation,” says Congress. The bill will use funds to reinvest in science and innovation for the semiconductor industry, focusing on national priorities. This is intended to give the United States leverage in new The US Senate passed a similar version of the law eight months ago Now the bills must be reconciled before President Joe Biden can sign the law.

Unfortunately, the COMPETES law will not provide immediate solutions to the chip shortage crisis. First, funds must be approved and then disbursed. Then the factories have to be built and the innovation programs have to start rolling. This will not happen overnight. The new chip factories are expected to begin production no earlier than 2024. However, experts hail this law as a significant step in the right direction for US and global industry. chip shortage crisis.

Next: Chip Shortage Hits iPhone 13, Apple Reportedly Cuts Production

Source: US Congress Competition Act

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