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.

Although China is not specifically mentioned therein, media outlets such as CNBC and Reuters have interpreted the CHIPS Act to be to boost US production in competition with China. The legislation ‘s section 103 stipulates that recipients of Federal incentive funds are prohibited from expanding or building new manufacturing capacity for “certain advanced semiconductors in specific countries that present a national security threat to the United States.”

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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