US Invests $280bn in Chips to Compete with Communist China

Fearing the country is losing its technological edge over Communist China, US President Joe Biden has signed a law committing $280bn (£232bn) into chip manufacturing and scientific research.

 These investments include tax incentive for companies that set up computer chip manufacturing factories in America.

 Business groups have long been seeking more government support on the grounds of the need to reduce their dependence on Communist China. The global shortage of microchips forced them to call for this.

 Chuck Schumer, the Democrat leader in the Senate, said the bill was a “game changer” that would ensure American leadership and prosperity over the next century.

 “Authoritarians were cheering for us to lose and hoping we sit on our hands,” he said. “By enacting the CHIPS and Science Act we are making clear we believe another great American century lies on the horizon.”

 The current production of semiconductors in America accounts for about 10% of the global supply, down from nearly 40% in 1990, from cars to mobile phones.

 The United States is not alone in investing in the industry. This spring, the European Union said it would commit more than 40 billion euros to increase the production of computer chips, and Communist China has been increasing its investment in technology.

 The Communist China’s Embassy in Washington opposed the semiconductor bill, saying it was reminiscent of “Cold War mentality”.

 In addition to chip investments, the bill also allocates about $200 billion to institutions such as the National Science Foundation to increase investment in robots and wireless communications.

 Biden called it an “once in a generational” investment, and said that it was already generating growth in America, and pointed out Micron’s plan to spend $40 billion on memory chip manufacturing, a project expected to create 40,000 jobs.