As of today, only 12 percent of chips are manufactured in the United States. It was 37 percent in 1990. However, in order to regain an edge in chipmaking, not just money but how it is spent will be needed. Industry leaders hope that new funds will help fuel a resurgence.

After a full of raged debate over a few months, the United States Congress passed the CHIPS and Science Act on Thursday. But, the question is, what exactly is it, and what impact is it going to have on our electronics? Don't worry! In this article, you find your answers. So, let's check out some of the crucial details about the CHIPS and Science Act.

What Is the CHIPS Act?

It is commonly referred to as just the CHIPS Act or H. R. 434 6. In both houses of Congress, H. R. 4346 has been bipartisanly supported. Before it becomes law, President Joe Biden must sign the final version - it may have already been signed when you read this.

The final version passed the House on Thursday with 243 votes in favor and 187 votes against. As its name implies, the CHIPS Act is primarily focused on creating "Helpful Incentives to Produce Semiconductors (CHIPS) for America Fund."

However, according to Droidician, approximately $52 billion is set aside for developing and adopting secure and trusted telecommunications, semiconductor, and supply chain technologies in the United States. In addition, this money will fund the construction of semiconductor fabrication plants.

Furthermore, the bill aims to improve STEM education programs, upgrade the Energy Sciences Network, and establish multiple "Carbon Materials Research Centers" across the United States.

There are more than 1,000 pages in the CHIPS Act as a whole. So it isn't surprising that chip manufacturers are also excited about the bill since President Biden has repeatedly praised it as a vehicle to invest in American science and technology.

"This is an important step to support the entire semiconductor industry in the United States," said Intel CEO Pat Gelsinger.

Why Does the CHIPS Act Exist?

Well, since the early 2000s, modern semiconductor chips have been in short supply, and they are needed to make all modern electronics, including smartphones and trucks. These problems are caused by a combination of factors, such as lack of production capacity, rising electronics demand, political disputes, and problems with the supply chain caused by the COVID-19 pandemic.

In addition, it has caused problems such as hard-to-find graphics cards (which are finally changing), carmakers leaving some features out of new cars, rising computer component costs, and others.

Despite the number of fabrication plants around the world, the majority of them can only manufacture larger node sizes, whereas new products require smaller node sizes. Qualcomm's Snapdragon 8 Gen 1 chipset, for example, is built on a four-nanometer process, unlike Intel's 14-nanometer Core i5-8250U, built a few years ago.

Modern electronics, especially portable devices, benefit from smaller processes that allow them to run faster and more efficiently. So, in addition to AMD's processors, Nvidia and AMD graphics cards, Intel chips, and other products, that's the same company that manufactures most of AMD's chips.

The chip supply chain is very complicated, so when one factory faces difficulties (like Taiwan experiencing a water shortage), it ripples throughout everything else. Therefore, it's crucial to build more factories around the world because that's the reason for its importance.

Chip production is also affected by other political factors. For example, the political tensions between China and the United States have escalated in Taiwan, where TSMC and most of its factories are located. In addition, the United States and mainland China are still at war over trade, so many factories are located there.

However, the CHIPS Act awards companies money to construct factories in the United States in order to reduce government dependence on imported chips. How-To Geek has no interest in geopolitical relations; simply put; many U.S. government officials would prefer a less dependent relationship with other countries for chips.

How To Cope Up With The Shortage Of Chips?

According to Gamedure experts, the U.S. must balance short-term investments that shore up capacity with investments to master cutting-edge manufacturing and develop next-generation technologies over the long term.

There are many ways in which TSMC and Samsung are ahead of their U.S. counterparts, including their power and entrenchment. In addition, other nations, such as China, are also investing vast sums in domestic chip manufacturing.

The challenge of catching up is difficult enough, let alone leapfrog ahead. A previous bill that was mired in political fighting in 2020 has been pared down with the chips and science bill.

As a result of strong bipartisan support, it passed the Senate by 64 to 33 votes on Wednesday, including 17 yes votes from Republicans, and passed the House by 243 to 187 votes today.

Does the CHIPS Act Matter to Us?

The CHIPS Act is of great importance to businesses and governments, but what about us? Do you think it will change our lives on a day-to-day basis? Unfortunately, this is a little harder to answer at the moment.

Undoubtedly, the CHIPS Act won't affect anything in the near future. This is because the process of planning and building a new chip fabrication plant can take years.

Nevertheless, if the new fabs provide more manufacturing capacity, semiconductor chip prices may drop, and electronics may become cheaper. In the near future, there may also be fewer shortages of chips due to diversified production.

Conclusion

There is a direct connection between this increase in supply and the reduction in inflation in the U.S. economy as a whole. So why would people want more goods when General Motors announced they were waiting for chips on 95,000 vehicles? And why would you want to raise the price of goods for everyone in the United States? We leave these questions for you; just try to get the answers. So, that's it from our side. We hope you find this article knowledgeable.