By a vote of 64-33 on July 27, the Senate approved the bipartisan CHIPS and Science Act of 2022. Over the course of five years, a total of $52.7 billion will be used as a financial incentive to create domestic semiconductor manufacturing capabilities and other initiatives.

In accordance with the legislation ‘s section 103, recipients of Federal incentive money are not permitted to increase or establish new manufacturing facilities for “certain sophisticated semiconductors in designated nations that pose a national security danger to the United States.” Although China is not mentioned by name therein, media outlets like CNBC and Reuters have interpreted it to mean that the CHIPS Act will increase US production in order to compete with China.

In the US$52 billion funding, US$39 billion is allotted over five years to support domestic chip manufacturing capabilities; US$2 billion is given to concentrate on legacy chip production to advance economic and national security interests; and US$6 billion may be used to cover the cost of direct loans and loan guarantees.

The budget for FY22 has been allotted US$19 billion, which includes US$2 billion for funding legacy chip manufacture. $5 billion annually between FY23 and FY26.

Additionally, US$11 billion has been allocated over a five-year period for R

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