Chip manufacturers are lobbying for over $70 billion in federal subsidies from the Department of Commerce to bolster domestic chip production in the United States. However, U.S. Commerce Secretary Gina Raimondo anticipates that the companies will not secure the full amount they are seeking.
The Department of Commerce reveals in a press release that leading-edge firms are requesting this funding through the 2022 Chips Act. This sum is more than double the amount currently available in federal funding for domestic projects. The legislation has earmarked $39 billion in grants and loan guarantees valued at $75 billion to augment domestic microchip and semiconductor production, as the United States has depended on overseas production for decades. By the end of this decade, the United States is projected to manufacture nearly 20% of the world's most advanced logic chips, a significant increase from its current 12%.
The surge in artificial intelligence development has been a key driver behind escalating chip demand in the United States. The Department is leveraging the CHIPS and Science Act to allocate over $53 billion towards enhancing research efforts within America's semiconductor industry. At present, Taiwan produces the most technologically advanced chips. Given rising tensions between China and the United States over Taiwan, it is crucial to stimulate production domestically should these tensions intensify around Taiwan Strait. Raimondo stated, "A.I. will be the defining technology of our generation," adding, "You can’t lead in A.I. if you don’t lead in making leading-edge chips. And so our work in implementing the CHIPS Act just got a whole lot more important."
In an effort to prevent China from obtaining advanced chips, steps have been taken by the United States to prohibit American chipmakers from selling products to China. These regulations have curtailed some AI chips being distributed to Chinese companies as both nations vie for dominance in AI.
