The 2020 Chips Act, was introduced to the House Of Representatives on the 6th of November of 2020. The name, CHIPS Act, is derived from the Act’s actual name, Creating Helpful Incentives to Produce Semiconductors for America Act.
Semiconductors play a significant role in American job creation, innovations, national protection, and commercial protection. The shortage of semiconductors is persisting, and manufacturers stay unsure of the future of the U.S. policy concerning semiconductor manufacturing and production.
Small producers and companies throughout all sectors are dealing with mainly adverse impacts from the modern-day semiconductor shortages, which cause starts and stops in production. These businesses and plants are leading sources of economic growth and jobs in communities across the country.
The Chips Act essentially seeks to establish investments and incentives aimed at supporting semiconductor manufacturing, research and development, and supply chain security in the United States. The bill particularly introduces an income tax credit for investments in semiconductor equipment and or manufacturing facilities until 2026. In this bill, we also see the establishment of a trust fund. This fund as is established in the Act is to be allocated after reaching an agreement with partners from foreign governments. The sought agreements will seek to ensure the promotion of the following elements with regards to microelectronics semiconductor manufacturing:
· Establishment of consistent policies with regards to microelectronics.
· Ensure openness in the microelectronic supply chains
· Streamlining of policies in the nonmarket economies.
But, the 2020 CHIPS Act still needs to be funded. Funding the Chips Act will assist in constructing and modernizing semiconductor production plants in America to improve the present-day chip scarcity, negatively impacting a variety of U.S. industries such as technology, defense, automotive, etc.
Fully funding the 2020 CHIPS Act would invigorate the economy, help secure the U.S. supply chain, and help jump-start semiconductors. It will also be significant in delivering investments for manufacturing, job training programs, and advanced technology investments for semiconductor technology.