The United States continues to pour money into chip production leading to a decline in Chinese reliance.
- In the U.S., more than 35 companies have pledged nearly $200 billion for chip manufacturing since 2020, according to the Semiconductor Industry Association.
- The billions will be put into 23 new chip manufacturing factories, nine plant expansions, and investments from equipment suppliers.
- The billions in investments will help the U.S. produce its own semiconductor chips needed for a plethora of technology and allow the country to not depend on China for the chips.
Why it’s news
Chips are an essential component of many things, from electric vehicles (EVs) to children’s toys, and the U.S. has mainly relied on Chinese sources to supply those chips, but not anymore.
The U.S. is pouring billions of dollars into internal chip production, allowing for prices of the tech to go down and the country to no longer rely on China for the chips.
The Biden Administration has offered at least $76 billion in grants, tax credits, and other subsidies to encourage U.S. chip production. Not only will this allow the U.S. a good economic income by providing these chips, but it will also keep China out of the equation.
Many have feared that the U.S.’s supply of chips could be cut off from China if a conflict ever arose. To eliminate that fear, the Biden Administration called for internal chip production so the U.S. would always have a flow of chips, and it would lower the price as they would no longer have to be shipped overseas.
It will be a while before the U.S. can reap the benefits of the internal chips as it will take a while for the factories and other institutions to be built and begin production on the chips, many predict the billions invested will be a good move by the U.S.