President Biden’s CHIPS and Science Act has been making headlines with its pledge to boost semiconductor production. Here’s the lowdown on what’s in the act and how it will affect businesses.

Semiconductors are an essential component of virtually all electronic devices today. Whenever you browse your smartphone, watch TV or work on your notebook, you’re relying on this invaluable piece of tech. Yet manufacturing semiconductors remains one of the world’s most complex industrial processes, and global shortages are increasingly common.

The good news is that production looks set to surge in the United States, thanks to the CHIPS and Science Act. Signed into law by President Biden this past August, the bipartisan legislation promises an injection of billions of dollars into semiconductor manufacturing. The act also pledges to revitalize scientific research and create well-paid American jobs.

what’s in the CHIPS and Science Act?

The act’s primary aim is to boost domestic production of semiconductors. The global semiconductor industry is expected to bring in $639.2 billion in 2022, yet the United States accounts for just 10 percent of production, compared with 37 percent in 1990. Meanwhile, East Asia currently manufactures 75 percent of the world’s supply.

To rebalance the scales, the CHIPS and Science Act is providing $52.7 billion for semiconductor research, development, manufacturing and workforce development within the U.S. Here's a quick summary of the act’s main goals:

  • fueling U.S. leadership in the semiconductor space
  • promoting U.S. innovation in wireless supply chains
  • advancing the United States as a global leader in the technologies of the future
  • catalyzing regional economic growth and development across the United States
  • creating STEM (science, technology, engineering and mathematics) career paths and opportunities

Encouragingly, the new law has already inspired the private sector to announce billions of dollars of additional funding, bringing the total investment to $150 million to date.

how will businesses benefit from the CHIPS Act?

In addition to bolstering semiconductor production, the CHIPS and Science Act will impact a wide range of industries by:

stimulating local economies

With $10 billion earmarked for regional innovation and the creation of tech hubs countrywide, the act’s historic investment promises to have a positive knock-on effect on all businesses.

securing supply chains

Since COVID-19 disrupted the global economy, the semiconductor shortage and resulting supply chain snarl-ups have been well documented. Increased domestic production will help alleviate these logjams, which hit the auto and consumer electronics industries especially hard.

building a strong and diverse workforce

Increased funding for STEM programs in schools, colleges and universities will help produce an agile, highly skilled workforce ready to tackle the demands of future technological developments. The CHIPs and Science Act sets aside $13.2 billion for research and development initiatives, of which “workforce training” is one. Manufacturers will benefit from private-public partnerships between laboratories and classrooms to train the next generation of technicians needed by regional semiconductor companies. And as the U.S. semiconductor industry grows, companies will need to add logistics and warehouse workers — packers, shipping clerks, logistics coordinators and other roles that are essential to an efficient supply chain.

What does the future hold? It takes time to allocate funding and to build semiconductor manufacturing plants, so it may be a while before the full impact of the act becomes apparent. In the meantime, effective talent acquisition strategies will be critical for any employer in the semiconductor space or related industries. Learn more about how Randstad USA can help you meet your present and future workforce challenges.