Public Law 117-167

Public Law 117-167, widely known as the CHIPS and Science Act of 2022, is a major piece of United States federal law enacted to bolster domestic semiconductor manufacturing, advanced technological research, and broader scientific competitiveness. Signed into law by President Joe Biden on August 9, 2022, the legislation represents a significant federal intervention aimed at reducing reliance on foreign chip production, particularly from TSMC in Taiwan and Samsung in South Korea, while countering the technological ambitions of the People's Republic of China. The act combines substantial financial incentives for domestic chipmakers with long-term funding authorizations for key science agencies like the National Science Foundation and the Department of Energy.

Legislative history

The genesis of the legislation lies in the global semiconductor shortage that acutely impacted industries from automobiles to consumer electronics, highlighting vulnerabilities in global supply chains. Its core provisions originated in the United States Innovation and Competition Act of 2021 passed by the Senate, but final passage required a separate, negotiated bill in the 117th United States Congress. Key architects included Senators Chuck Schumer and Todd Young, who championed the research components, and members of the House Science Committee. After extensive conference negotiations between the House and Senate, the final version, H.R. 4346, passed both chambers with bipartisan support in late July 2022, receiving votes from prominent Republicans like Senator Mitch McConnell amid broader debates over other economic legislation.

Provisions

The law is structured around two primary titles. Title I, the CHIPS Act of 2022, appropriates over $52 billion in financial incentives, including $39 billion in subsidies for constructing or expanding semiconductor fabrication facilities within the United States, administered by the Department of Commerce. It also establishes a 25% investment tax credit for semiconductor equipment and manufacturing, and includes $11 billion for advanced research and development initiatives led by the National Institute of Standards and Technology and the Defense Advanced Research Projects Agency. Title II, the Research and Development, Competition, and Innovation Act, authorizes increased funding for the National Science Foundation, particularly for its new Directorate for Technology, Innovation and Partnerships, and mandates research investments in areas like artificial intelligence, quantum computing, clean energy, and biotechnology.

Impact and reception

The act has been hailed by the Biden Administration, industry leaders like the Semiconductor Industry Association, and governors from states like Ohio and Arizona as a transformative investment in industrial base and national security. It prompted immediate announcements of major domestic investments from companies such as Intel, Micron Technology, Texas Instruments, and GlobalFoundries. Critics, including some members of the Congressional Progressive Caucus and economists from the Cato Institute, have raised concerns about corporate welfare, potential market distortion, and the efficacy of large-scale industrial policy. Geopolitically, the law is viewed as a direct challenge to China's semiconductor ambitions and a key element of the strategic competition between the United States and the People's Republic of China.

Implementation and funding

Implementation is overseen primarily by the Commerce Department's CHIPS Program Office, which reviews applications for manufacturing grants and ensures compliance with guardrails prohibiting recipients from expanding advanced chip production in China for a decade. The National Science Foundation and the Department of Energy's Office of Science are responsible for disbursing research funds and establishing new technology hubs. Funding for the incentives in Title I is fully appropriated, while the authorizations in Title II for agencies like the NSF require subsequent annual appropriations from Congress. The SelectUSA Investment Summit has become a key forum for promoting the act's benefits to international firms like ASML Holding.

Related legislation

Public Law 117-167 is directly related to and builds upon the United States Innovation and Competition Act of 2021, which originated in the Senate. It is also a legislative companion to the Inflation Reduction Act of 2022, which focuses on clean energy and climate change mitigation, together forming the core of the Biden Administration's economic agenda. Other relevant statutes include the National Defense Authorization Act for Fiscal Year 2021, which contained earlier semiconductor provisions, and the American COMPETES Act of 2022, the House counterpart to the USICA. Its trade and technology policies align with initiatives like the Quad's critical technology principles and export controls coordinated with allies such as Japan and the Netherlands.

Category:2022 in American law Category:United States federal legislation Category:117th United States Congress