U.S. House of Representatives passes America COMPETES Act to bolster domestic chip manufacturing

The U.S. is one step closer to reinvesting in the semiconductor industry.

US House passes COMPETES Act
Photo via House.gov

The United States House of Representatives voted to pass the America COMPETES Act, which joins the CHIPS for America Act and FABS Act in incentivizing domestic semiconductor production.

Once holding nearly 40 percent of all chip manufacturing in 1990, the US has dropped to 12 percent of total global production, according to the Semiconductor Industry Association (SIA). SIA claims that much of this decline falls on the fault of the US government’s lack of investments in semiconductor technology and research that other countries have made.

With the “China competition” bill, the government would provide several measures to help semiconductor production companies. These measures include $39 billion in direct subsidies for creating new fabrication facilities—a total of $52 billion is proposed for the bill.

TSMC, which plans to build a $12 billion facility in Arizona starting 2024, and Intel, which has a $20 billion facility already under construction in Ohio, would qualify for the subsidies. Other manufacturers like Samsung and Texas Instruments also have planned facilities in development.

Before this bill, the Senate passed its version of the COMPETE act, known as the US Innovation and Competition Act (USICA), with its own set of subsidies in June 2021. The House and Senate will amalgamate both bills before it reaches President Biden’s desk.

Although this bill won’t impact the current supply chain shortages—new foundries likely won’t begin production until 2024—the long-term effects of US investments in the industry will have a positive impact on future chip availability. The current shortage is expected to end in the latter half of 2022, going into 2023, according to Intel’s CEOs. Hopefully, more domestic chip manufacturers will slash costs for GPUs and CPUs soon.