The bill includes more than US$52 billion for US companies producing computer chips and will provide tens of billions of dollars to fund scientific research and development to spur the innovation and development of other tech companies in the US.
The aim of the Chips and Science Act (CHIPS) is to encourage investment in the semiconductor manufacturing industry.
East Asia currently accounts for around 75% of the global production of semiconductors and the bill will reduce reliance on China for the components, Biden said.
The legislation comes at a time of shortages in the US, triggered by Covid-19, which has crippled the production of cars, video games and weapons.
Biden called the legislation a “once in a generation investment in America itself”, adding that the investment will help bring down inflation in the country by lowering costs for manufactured products that rely on semiconductors.
The White House noted that Qualcomm, one of the world’s largest chip manufacturers, has already agreed to purchase an additional US$4.2 billion in semiconductor chips from GlobalFoundries’ New York factory.
This will bring its commitment to US7.4 billion through to 2028.
Separately, Micron will be investing US$40 billion in memory chip manufacturing. That initiative will create 8,000 new jobs and boost the US market share of memory chip productions to 10% from 2%.
China had previously stated its opposition to the bill, calling it something reminiscent of a “Cold War” mentality.
