President Joe Biden signed into law the CHIPS and Science Act on Tuesday, August 9. The act will allocate billions in funding to US semiconductor research and manufacturing, according to the White House.
“The future of the microchip industry is going to be made in America,” Biden said at the White House press conference.
The CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act passed both houses of Congress last month with bipartisan support. It is part of Biden’s plan to bolster the US economy while also leveling out the manufacturing playing field with China, the White House said in a statement.
The Semiconductor Industry Association said, “The share of modern semiconductor manufacturing capacity located in the U.S. has eroded from 37% in 1990 to 12% today, mostly because other countries’ governments have invested ambitiously in chip manufacturing incentives and the U.S. government has not,” and called the passage a “big win for our country.” Credit: The White House via Storyful
PRESIDENT JOE BIDEN: I'll tell you what, Detroit's making some really hot vehicles. They even got a Hummer that can go 4.1 from 0 to 60. That's faster than my Corvette, and my Corvettes older than I am, almost. But what I realize is that my Corvette's now worth a hell of a lot more than when I bought it. I got it original 5700 bucks, they tell me it's worth a lot of money. But I know if I ever sell it, a bow come down from heaven and smite me down. But anyway.
And by the way, that new Corvette that's electric Corvette, I got a commitment that I don't think I'm going to be able to enforce, that I get to buy the first one because it's going to be out before I'm out of office. But anyway, look folks, Chuck, you've done a hell of a job. You really have. You really have. And Speaker Pelosi, you always get it done. You always get it done come hell or high water, you get it done.
And I want to thank Secretary Raimondo. And Josh, thank you for the introduction. Josh loves electric cars. He graduated from Syracuse, he's my kind of guy. What more do you need? Syracuse and electric cars. Look, this bill I'm about to sign into law in my view represents what I've always believed. America is the only nation in the world-- and I believe this with every fiber of my being-- the only nation in the world that can be defined as I've told Xi Jinping several years ago, by a single word.
He asked me to define America for him when I was in China. And he and I were alone in the Tibetan plateau. I said, I can do it in one word and I mean it. Possibilities. In America, everything is possible. We believe every and anything is possible. It's part of the soul of this country. I mean, it really is. We can channel all our resources. Most of all, we can channel the full talents of all our people in their greater measure of hope and opportunity for our nation and for the world.
To create good jobs, empower workers, grow the economy, not just for the wealthy, but grow for everyone. To change the course of human health and disease. To tackle climate crisis with innovation and jobs. To lead the world, not this-- not hyperbole, to lead the world and future industries and protect our national security. We've always gotten it-- we haven't always gotten it right, but we've never walked away from that sense of possibility that drives this country, never.
Now, it matters today, I think more than anything in a very long, long time. You're tired of hearing me say this, those who work with me so closely. But that's because we face an inflection point in our nation and around the world. Fundamental change is taking place today, politically, economically, and technologically. Change that can either strengthen our sense of control and security, of dignity and pride in our lives and our nation, or change that weakens us.
So the people are left behind, causing them to question whether or not the very institutions, our economy, our democracy itself can still deliver for them, for everybody. This is the moment we face. I really mean this. I believe with every fiber of my being. We hear all the noise out there. We know, there are those who focus more on seeking power than securing the future-- excuse me, than securing the future. Those who seek division instead of strength and unity, who tear down rather than build up.
Today's a day for builders. Today America is delivering, delivering. And I honest to God believe that 50 75, 100 years from now, some people who will look back on this week, they'll know that we met this moment. Today I'm signing the law the chips and science act, a once in a generation investment in America itself. A law that the American people can be proud of. I call for elements of this law when I first came to office. I want to thank everyone, everyone here who helped make it possible.
Vise President Harris and the Second Gentleman, members of the cabinet and the White House team, members of the United States Congress of both parties, Majority Leader senators, Cantwell Young Portman, I don't want to get you in trouble but you did a hell of a job. By the way, he's a good man. That's a different story. I just probably cost him, I apologize. All kidding aside, thank you. Thank you, thank you.
And along with senators Cornyn and Wicker helped keep this bill on track beginning to end. In the house, I thank Speaker Pelosi and Steny Hoyer, and representative, Eddie Bernice God love you. You're sitting there, you're ready, you did it, oh you moved. Frank Pallone, I keep in mind Frank, he's in New Jersey. But Delaware owns to the high water mark in the shore of New Jersey. We had a court case about that. I just want you to know that.
Mike McCaul, Doris Matsui and the man who holds the seat I used to hold, Chris Coons. Look, so many other Democrats and Republicans alike are committed to getting this bill done. And while the bipartisanship in Congress is critical, I also want to acknowledge something else. Look at the people here today. You come from all different backgrounds to support this bill.
Governors like the governor of Illinois. I see legislators, mayors, state legislators, entrepreneurs business people labor they're the reason why we're here they're the reason why we got this far scientists, technologists, engineers physicians, presidents of four year and community colleges, both. Civil rights leaders, national security leaders, government officials.
I met with many of you through this process. So many of you have spent years and years calling for key investments that are made in this bill. For years you've been calling for it. You help make it happen. You represent why we are better positioned than any other nation in the world to win the economic competition of the 21st century. You're the reason why I'm so optimistic about the future of our country.
The chips and signs act supercharged our efforts to make semiconductors here in America. Those tiny computer chips smaller than a fingertip that are the building blocks for our modern economy powering, everything. From smartphones to dishwashers, automobiles. In fact, there are as many as 3,000 semiconductors per vehicle made today, 3000 per vehicle.
America invented the semiconductors. They powered NASA's mission to the moon. Federal research and development brought down the cost of making them, and built a market in an entire industry. As a result, over 30 years ago, America had 40% of the global production of these chips. And then, something happened. American manufacturing, the backbone of our economy was hollowed out. We left semiconductor manufacturing overseas. And as a result today we barely produce 10% of the semiconductors-- excuse me-- despite being the leader in chip design as well as research. And as we saw during the pandemic.
With factories that make these chips shut down, the global economy comes to a screeching halt, driving up costs for families, and everyone, not just here, but around the world one third the core inflation last year was due to the higher price for automobiles for automobiles and a shortage of semiconductors. Folks, we need to make these chips here in America to bring down everyday costs and create jobs. Don't take my word for it. Listen to some of the business leaders here today and across the country. They're making decisions right now about where to invest and ramp up production for these semiconductors.
Many are foreigners making investments, companies deciding where in the world to go and they've chosen the United States of America. They look at China, Japan South Korea, the European Union, all making historic investments of billions of dollars to track the businesses to their countries to produce these chips. But these industry leaders also see America is back and leading the way.
During my stay in the Union, I described the Field of Dreams on 1,000 acres outside of Columbus, Ohio, where America's future will be built. Intel, the CEO is here today, Pat Gelsinger is here today. He's going to break ground on the next generation semiconductor factory in Central Ohio, early this fall. American company, Micron is announcing today that because of this law, it's going to invest $40 billion over 10 years to build factories and special chips called memory chips that store information on your smartphone.
Investment, this investment alone is going to create 40,000 jobs-- excuse me, I'm sorry-- and increase market share in memory chips by 500%. Two more American companies. I want to take another sip of water. Two other companies, GlobalFoundries and Qualcomm announced yesterday, a $4 billion partnership to produce chips in the US that would otherwise have gone overseas.
Qualcomm is one of the world's largest buyers of chips. Is planning to increase its chip production by up to 50% over the next five years. These companies see what I see, that the future of the chip industry is going to be, Made in America. For folks at home, there's a broader supply chain that makes these semiconductors that connect countless other small businesses and manufacturers. This law funds the entire summer conducting-- semiconductor supply chain for research and development to key inputs like polysilicon, manufactured by a factory in Hemlock, New York.
Nearly one third of all the chips in the world use polysilicon made in Hemlock. Imagine if you had more of these kinds of factories across the country. This law will make that a reality. There's analysis that says, investment in the chips and science act will create one million-- more than one million construction jobs alone over next six years building semiconductor factories in America.
America invented the semiconductor, as has been mentioned already. And this law brings it back home. It's in our economic interest, and it's in our national security interest to do so. Early this year, I went down to Lockheed's factory in Alabama where they're making the javelin missiles that we're supplying Ukraine to defend themselves against Putin's unprovoked war. It is crystal clear we need these semiconductors, not only for those javelin missiles, but also for weapon systems of the future that are going to be even more reliant on advanced chips.
Unfortunately we produce 0% of these advanced chips now, and China is trying to move away ahead of us in manufacturing these sophisticated chips as well. It's no wonder the Chinese Communist Party actively lobbied US business against this bill. The United States must lead the world in the production of these advanced chips. This law will do exactly that.
And to be clear, this law is not handing out blank checks to companies. Today I'm ordering my administration to be laser focused on the guardrails that will protect taxpayers' dollars. It means making sure that companies partner with community colleges and the technical schools to offer training and apprenticeship programs, and work with small and minority owned businesses. They'll have the power-- we'll have the power to take back any federal funding if companies don't meet these commitments required by the Bill.
This includes requirements that companies building these semiconductor facilities pay Davis-Bacon prevailing wage to ensure the tens of thousands of new construction jobs are union jobs. We'll not allow companies to use these funds to buy back stock or issue dividends. And finally, this bill is about more than chips, it's about science as well.
Decades ago, we used to invest 2% of our GDP that led the world in everything. It led the world in everything from internet to GPS. Today, we invest less than 1%. We used to rank number one in the world in research and development, now we rank number nine. China was number eight decades ago, now they are number two. And other countries are closing in fast.
This law gets us moving up once again. It authorizes funding to boost our research and development funding closer to 1% of the GDP, the fastest single year percentage increase in 70 years, and it's going to make a difference. This increased research and development funding is going to ensure the United States leads the world to the industries of the future. From quantum computing, to artificial intelligence, to advance biotechnology, kinds of investments that will deliver vaccines for cancer cures, for HIV. Invent the next big things that hadn't even been imagined yet.
The law has requirements that any company that receives federal research development will have to make that technology they've invented here in America. That means we'll invest in America, and invent in America, and make it in America. We're going to make sure we include all of America. Supporting entrepreneurs and technological hubs across America, including historic Black colleges, universities, minority serving institutions, tribal colleges. We're going to tap into our greatest competitive advantage, our diverse and talented workforce, urban, rural, suburban, and tribal.
When people like Josh came up with his idea for portable electric car Chargers five years ago in Buffalo, New York. And all the young people out there today, who have an idea, that spark of imagination. To solve a problem they see. To cure a disease they have. To dream to make the impossible possible, this law is for them.
Let me close with this. Last month I awarded Steve Jobs Presidential Medal of freedom posthumously. At every turn of his life, he dared to think differently. Embodied that most of American questions, what next? The chips and science act is going to inspire a whole new generation of Americans to answer that question, what next? Right now, as Bill can tell you, NASA has a mission, going back to the moon, then to Mars, the sun and beyond, capturing images of distant galaxies we can only once dream existed and we could never think we could see.
The chips and science that captures that magic here on Earth. It also builds on the progress we've made to rebuild America's with a historic infrastructure law that I signed last year, that's going to modernize our roads, our bridges to deliver clean water, high speed internet for every American. Builds on another one of my many top priorities, the creation of a Advanced Research Projects Agency in health for health ARPAH. It's going to transform how we detect, treat, cure diseases like Alzheimer's, diabetes, and cancer.
And tomorrow, I'm signing the most significant law ever to help veterans suffering from exposure to toxins from burn pits. And soon, I hope to be signing the inflation Reduction Act into law that's going to lower the cost of health care and energy and make historic investments to tackle climate crisis. Once that law is signed, any senior by the first of the year, no matter how high-- If they're on Medicare-- no matter how high their drug bills are, will never have to pay more than $2,000 a year, just one specific example beginning in January. There's a lot going to happen.
If all the division in our country is showing ourselves and the world that we can take on the biggest challenges. We can take on the special interest. And that democracy can deliver for the people of this country. That's why I'm confident that decades from now, people can look back at this week with all we passed and all we moved on, that we met the moment at this inflection point in history. A moment when we bet on ourselves, believed in ourselves, and recaptured the story, the spirit, and the soul, of this nation
We are the United States of America, a singular place of possibilities. I'm now going to go sign the chips and science act. And once again, I promise you, we're leading the world again for the next decades, thank you.
Well, you made it. We've got a long way to go. We have to get the word out [INAUDIBLE]. OK. Ready? Got it. So it's law.