Biden signs US CHIPS bill, semiconductor funding, into law

US President Joe Biden signed the CHIPS and Science Act into law August 9, unlocking over $52 billion in federal funding for domestic semiconductor manufacturing and other provisions in a bid to ease the impact of the global chip shortage that has tied up several key industries since late 2020.

"The CHIPS and Science Act supercharges our ability to make semiconductors...that are the building blocks for our modern economy, powering everything from smartphones to dishwashers to automobiles," Biden said during a signing ceremony at the White House.

The funding package "includes $39 billion in manufacturing incentives, including $2 billion for the legacy chips used in automobiles and defense systems, $13.2 billion in [research and development] and workforce development, and $500 million to provide for international information communications technology security and semiconductor supply chain activities," the White House said in a separate statement Aug. 9.

The legislation also establishes a 25% tax credit for investments in semiconductor manufacturing, including the manufacturing of specialized equipment required for chip production. Furthermore, it provides $19.4 million in "emergency supplemental funding to address security threats to the Supreme Court of the United States," according to the statement.

Biden said the CHIPS bill includes "guardrails," or requirements, that hold funding recipients accountable for how the money is ultimately used for domestic benefit.

According to the White House statement, the guardrails ensure "that recipients do not build certain facilities in China and other countries of concern, and [prevents] companies from using taxpayer funds for stock buybacks and shareholder dividends."

The global semiconductor shortage has disrupted supply chains and production in multiple industrial sectors since late 2020. The automotive industry has notably suffered ongoing production outages, amid surging demand for new cars, because of a lack of semiconductor computer chips that are critical for technological and safety systems in modern vehicles.

Uncertainty in the automotive sector has subsequently caused its demand for steel and aluminum, as well as other major metals, to slump. The industry represents a key end market for metals producers.