The US CHIPS Act: Why Intel Supports It

Intel’s leaders support the act to incentivize more private-sector investment with the hope it will enable a resilient and innovative semiconductor supply chain.

As the world comes to grips with chip shortages due to supply chain disruptions and ripple-effects from the global pandemic, Intel’s leaders are urging Congress to fund the CHIPS for America Act to create a more stable future for the U.S. tech industry.

In 1990, 80% of the world’s semiconductors were produced in the U.S. and Europe. Today, 80% are produced in Asia, where countries provide substantial incentives to domestic semiconductor industries. This helps create a 30% to 50% cost disadvantage for companies that produce semiconductors in the U.S.

Increasing manufacturing in both the U.S. and the European Union is key to helping rebalance the global supply of chips. In February, President of the European Commission Ursula von der Leyen announced the European Chips Act, with the goal of doubling the EU’s global semiconductor manufacturing share to 20% by 2030. It also provides for more R&D investments in disruptive technologies, supports small business and startups by attracting new talent to Europe for them, and focuses on building partnerships with like-minded countries to strengthen interdependencies.

The CHIPS for America Act became law in January. In March, the Senate passed $52 billion in funding for those programs in a strong bipartisan vote. The funding still needs to be approved by the House of Representatives.

“Time is of the essence,” said Intel CEO Pat Gelsinger during a March hearing in Washington, D.C.

American businesses in every sector across the economy are facing a semiconductor shortage, he added, “and the only way to alleviate the current supply-demand imbalance long term is to increase manufacturing capacity by funding and implementing the CHIPS Act.”

Our economic security, Gelsinger said, depends on reliable, resilient access to semiconductors.

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Editor's Note: Ursula von der Leyen's title has been corrected to president of the European Commission.