CHIPS & Science Act

The Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act was signed into law in August 2022 to bring microchip manufacturing back to the US.

• US President has recently announced a $100 billion investment by Taiwan Semiconductor Manufacturing Co (TSMC) in the US for five new fabrication plants.
• About CHIPS Act: Aims to boost domestic semiconductor production after decades of offshoring.

o US share in semiconductor production fell from 40% (1990) to 12% (current), while Taiwan produces over 60% of global semiconductors and over 90% of the most advanced chips.

o Companies eligible for a 25% tax credit under the law.

• About Semiconductors: Also known as microchips or integrated circuits, made from silicon.

o Contain millions or billions of transistors that flip on/off to process data.

o Essential for modern technology, from household appliances to defense systems, mobile phones, and cars.