Viewpoint: CHIPS bill is a win for New England
By James T. Brett
In late July, after nearly two years and multiple iterations, Congress passed a sweeping piece of bipartisan legislation aimed at bolstering domestic semiconductor manufacturing, as well as making key investments in research and development. The New England Council was proud to support the CHIPS and Science Act, and its passage is a huge win for the New England innovation economy.
This new law makes more than $50 billion in investments to bolster the U.S. semiconductor manufacturing industry. Over the past several years, our nation has experienced a critical shortage of semiconductor chips. The shortage is the result of a perfect storm of circumstances, including a variety of supply chain constraints, combined with an increased demand for electronics to support remote work and schooling amid the pandemic. Semiconductors enable the key technologies driving the future economy and our national security, including artificial intelligence, quantum computing, cloud services, and more. New England is home to a number of semiconductor manufacturers, as well as a wide array of technology businesses.
The percentage of modern semiconductor manufacturing capacity located in the U.S. has declined significantly from 37% in 1990 to just 12% today, according to the Semiconductor Industry Association. This is due in large part to the fact that other countries – such as China, India, and Korea – have invested in chip manufacturing incentives, while the U.S. has not. Federal investment in chip research has remained stagnant, while other nations have ramped up.
The CHIPS and Science Act will make significant strides to address the shortage and increase domestic capacity by providing $52 billion in subsidies for U.S. semiconductor production, as well as an investment tax credit for chip plants, estimated to be worth $24 billion. The new law authorizes more than $170 billion over five years to boost U.S. scientific research to better compete with China.
This legislation makes several other important investments to support growth in the New England innovation economy. The bill authorizes $81 billion in funding over five years for the National Science Foundation to support STEM education, establish regional technology hubs, and support a new technology directorate aiming to turn basic research breakthroughs into real-world applications. New England is home to some of the world’s leading research institutions and received nearly $800 million in NSF funds in 2021, including $560 million in Massachusetts alone. Our region will undoubtedly benefit from this additional infusion of NSF funding.
The bill provides research funding for the Department of Commerce, the Department of Energy, NASA, and National Institutes of Standards and Technology to increase investments in research and development.
The investments in this bill will breathe new life into domestic semiconductor manufacturing, make our nation more competitive on the global stage, and spur new research and scientific breakthroughs that will no doubt have a lasting impact for years to come.