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24 Feb 2023

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US Chips & Science Act a Matter of National Security, Commerce Secretary Says

The US Chips and Science Act, passed in 2022, is focused on national security rather than sustaining weak companies, according to remarks from Gina Raimondo, Secretary of Commerce in the Biden Administration. The act authorized $280 billion to support domestic semiconductor research and development, aiming to counteract the emerging dominance of China in the area of high-end chip fabrication.

“I expect there will be many disappointed companies who feel that they should have a certain amount of money. The reality is the return on our investment here is the achievement of our national-security goal,” Raimondo said during a press conference.

The Act was prompted by several supply-chain kinks in the wake of the covid pandemic, stalling new-vehicle deliveries and supply problems with other products that increasingly rely on semiconductors. It aims to return the US to an earlier position as a world leader in chip production by 2030. The US share of worldwide chip manufacturing has dropped precipitously from 37% in 1990 to 12% today, according to Raimondo.

But an emphasis on military firepower, including drones, and satellites sends a message that this was not meant to be a subsidy for existing operations. “America needs to design and produce the world’s most advanced chips right here in America,” she said. “The purpose of this legislation isn’t to subsidize companies because they’re struggling in a cyclical downturn, (and) it isn’t to help companies necessarily become more profitable in America.”

Photo of Secretary Gina Raimondo from US Department of Commerce.

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