Joe Biden will sign legislation to boost production in the United States

Two years of difficult negotiations, the search for compromises and warm exchanges finally paid off. After getting the green light from the Senate and the House of Representatives last week, the Chips and Science Act now waiting for the signature of US President Joe Biden to enter into force.

If the road is long to allow this law to see the light of day, the result is nothing to ignore, and marks the return with much praise of a proactive industrial policy of the United States. 280 billion will be invested, including 52.7 billion that will be allocated to support the production of semiconductors in American soil and research in this technology with the help of subsidies. Another 24 billion will be spent on tax incentives for the same purpose. The rest of the 280 billion should be invested in research on critical technologies, the development of clean energy, nuclear physics, and to allow NASA to prepare future missions to the Moon and Mars.

Semiconductor factories have grown like mushrooms

The law’s effects have already been felt even before its implementation, as many semiconductor manufacturers, including Intel, Taiwan Semiconductor Manufacturing Co. (TSMC) and GlobalFoundries have started building foundries in the States. the law was passed.

Intel CEO Pat Gelsinger, in office since January 2021, has made this goal one of his priorities. After announcing its intention to invest 20 billion in two production plants in Arizona last year, the company has recently doubled with a similar investment dedicated to the opening of two more factories in Ohio , in the heart of Rust Belt.

Microprocessors: how the United States wants to get out of the China rut

The pandemic shows that today’s industry is more geographically concentrated (80% of the chips used in the world are made in Asia), with the risks involved. We want a stronger global industry, and we believe that the best way to achieve this is to build strong local industries, so that production capacities are more distributed. approx. “, he recently confessed to La Tribune.

It is also in Arizona that the Taiwanese giant TSMC sets its sights on building the first semiconductor production plant on American soil, where it has invested 12 billion dollars. GlobalFoundries, another American giant in the sector, for its part will spend between 6 and 8 billion to build a new factory in Saratoga County, New York State.

A bipartisan effort to fight the Chinese dragon

In the Senate as in the House of Representatives, the legislation received support from several elected Republicans, including Senate Republican minority leader Mitch McConnell. A rare bipartisan agreement in a deeply divided American political landscape. If they are at odds over the country’s internal affairs, the two parties are more likely to agree when it comes to foreign policy.

However, the desire to transfer the production of semiconductors to the national soil is mainly motivated by the rise of China and the risk of Taiwan’s invasion of the Middle Kingdom. ” It is no exaggeration to say that semiconductors are the be-all and end-all of our technological competitiveness in China. “, thus confirmed at the end of July the number 2 of the Pentagon, Kathleen Hicks.

The United States maintains a dominant position in high-end semiconductor design, thanks to giants such as Intel, Qualcomm and Nvidia. On the other hand, in terms of the physical production of chips, the country sees its position weakened in favor of Southeast Asia: only 12% of the world’s microprocessors are manufactured in the United States, against 37% in 1990. One reduction that the Chips & Science Act aims to prevent.

Its defenders point to the major subsidy policies adopted by Southeast Asian countries, especially Taiwan and South Korea, which have enabled them to create national champions, such as the Taiwanese TSMC, which alone dissolve the 60 % of microprocessors used worldwide. During her recent visit to Taiwan, which greatly angered Chinese leaders and led the country to conduct major military maneuvers near the island, Speaker of the House of Representatives Nancy Pelosi cautioned in meeting with the leaders of this company, where the United States is trying to convince to decentralize its production in the face of the growing threat from China. Beijing has never recognized Taiwan’s sovereignty, and President Xi Jinping recently pledged to ” reunification with the island in one of his speeches.

Taiwan’s industrial confidence is worrying everyone

It is important to reduce the world’s economic dependence on Taiwan, which is currently under threat from China. TSMC took the lead by building a foundry in Phoenix, Arizona. They also want to increase their production activities in Japan says Russ Shaw, founder of Global Tech Advocates, an international network of innovative technology players.

If we add the context of the shortage, we understand that semiconductors have become a strategic issue for the United States, but also for the United Kingdom and Europe. The United States is quickly mobilizing the public and private sectors, with Samsung announcing the construction of a new factory in Texas, Intel investing in Ohio, and now the Chips & Science Act is about to be signed. The European Union and the United Kingdom are making similar efforts.

This is all part of an important long-term strategy that I hope these countries will continue. In a turbulent geopolitical context, we must ensure a competitive environment to mitigate risk. Concentration of production in one country is not sustainable. »