US Congress approves Chips Act to boost semiconductor production

Tags: National News

The US House of Representatives has passed the Semiconductors and Science Bill to provide $280 billion in aid and subsidies to its semiconductor industry facing competition from China.

Important facts

  • The bill would provide "$52 billion of subsidies and additional tax credits" to companies making chips in the US.

  • An amount of $ 200 billion has also been allocated for scientific research of artificial intelligence and other innovative technologies.

  • Last year, a global shortage of semiconductors or chips led to the recognition that the US needed substantial manufacturing of its own.

  • Since 2020, the increasing use of devices such as laptops in homes has further fueled its demand.

  • According to a Forbes report, about 75% of the world's dependence on semiconductors is met by East Asia.

  • The bill states that currently only 12% of chips are manufactured domestically, compared to 37% in 1990, and several countries, including China, are investing heavily to dominate the industry.

  • The bill would reduce America's reliance on foreign sources of semiconductors and strengthen national security.

What are Semiconductor Chips?

  • It is a material which has conductivity between conductor and insulator.

  • Compounds of silicon or germanium or gallium, arsenide or cadmium selenide are used in this.

Why are semiconductors or chips so important?

  • It serves as the centre and brain of all modern electronics and information and communication technology products.

  • The chips are used as data-storing memory chips, or logic chips that run programs.

  • Manufacturing of chips requires a lot of precision as well as investment.

  • This requires special conditions where even small disturbances around or inside the manufacturing unit can hamper production.

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