Biden will sign bill to promote US chips, compete with China

WASHINGTON, Aug 9 (Reuters) – President Joe Biden on Tuesday pledged to provide $52.7 billion in subsidies for US semiconductor production and research and boost efforts to make the United States more competitive with China’s science and technology efforts. to sign a bill.

The White House is investing that chip companies are doing, though it’s unclear when the US Commerce Department will write rules for reviewing grant awards and how long it will take to underwrite the projects.

Chief executives from Micron, Intel, Lockheed Martin, HP (HPQ.n) and Advanced Micro Devices (AMD.O) will attend the signing, which is scheduled for 10 a.m. EDT, as will cabinet officials and the auto industry and union. The White House, including the leaders, said Auto Workers chairman Ray Curry.

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In addition, the governors of Pennsylvania and Illinois, mayors and lawmakers from Detroit, Cleveland and Salt Lake City will also participate.

The White House said the passage of the bill is encouraging new chip investments. It noted that Qualcomm (QCOM.O) on Monday agreed to buy an additional $4.2 billion in semiconductor chips from the GlobalFoundries (GFS.O) New York factory, bringing a total commitment of $7.4 billion in purchases through 2028. Read more

The White House also said that Micron is announcing a $40 billion investment in memory chip manufacturing, which would increase US market share from 2% to 10%.

The law aims to address the persistent shortage that has affected everything from cars, weapons, washing machines and video games. Thousands of cars and trucks wait for chips in southeast Michigan as shortages hit automakers.

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A rare staple in US industrial policy, the bill also includes a 25% investment tax credit for chip plants, estimated to be worth $24 billion.

The law authorizes $200 billion over 10 years to boost US scientific research to better compete with China. Congress would still need to pass separate appropriations legislation to fund those investments.

China had lobbied against the semiconductor bill. The Chinese embassy in Washington said China “strongly opposed” it, reminding it of a “Cold War mentality”.

Several US lawmakers said they would generally not support huge subsidies for private businesses, but noted that China and the European Union are awarding billions in incentives to their chip companies. He also cited national security risks and huge global supply chain problems that have hampered global manufacturing.

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Reporting by David Shepardson; Editing by Bradley Perrett

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