Anderson Herald Bulletin
If a Hoosier reporter had talked to Sen. Todd Young before the Nov. 8 election and failed to ask about semiconductors, the senator would bring up the Creating Helpful Incentives to Produce Semiconductors for America Act, or CHIPS Act, signed into law by President Joe Biden in August.
Young, a Republican, was a co-sponsor of the bill presented by Sen. Chuck Schumer, the Democratic majority leader from New York.
Notable for gaining bipartisan support, the CHIPS Act may well determine the future of manufacturing in America and more pointedly the Midwest.
The federal budget devoted to research and development as part of the gross domestic product is at its lowest point in 60 years. In total spending across the board for R&D as a percentage of GDP, the U.S. is in ninth place, formerly fourth, behind Germany, South Korea and Japan.
Among its provisions, the act provides at least $52 billion in grants and incentives for the semiconductor industry and pledges $200 billion in spending over 120 years for research. It also calls for creation of a national science semiconductor technology center. Schumer pushed for the center to be in Albany, New York.
More locally, Purdue and Indiana universities have said the act will boost programs and research. Gov. Eric Holcomb has expressed hope that Notre Dame, Rose-Hulman and Ivy Tech Community College also will benefit by graduating talented students engaged in the industry.
Keep in mind that a majority of Indiana’s representatives in Congress voted against the bill, as did U.S. Sen. Mike Braun. They argued it would add to the national debt or would send tax dollars to China.
Gloom aside, the most interesting aspect of the act is in its push for innovation.
Think back to the 1960s space race between the United States and the Soviet Union. The country was transfixed, watching every rocket launch. Nowadays, it might be difficult to compare Apollo 11’s landing on the moon to the semiconductor lasers used in exploring the atmospheres of Venus, Saturn and other solar bodies.
After all, semiconductors and microchips have been with us since the 1950s, gaining wider media coverage in the 1980s with accounts of lawsuits between corporations over copyright infringement. And how about the efforts in the 1990s to place a location-finding microchip in one’s pet?
But as one advance in ingenuity led to another, the CHIPS Act may have promise for the future.
After all, there is a technology race now between the U.S. and Eastern Asia, with China reportedly investing $1.4 trillion over the next five years to become self-reliant in semiconductor production. That’s equal to the decline in the U.S. federal budget for fiscal year 2022.
China accounted for less than 4% of the market half a decade ago but is now on pace to control roughly 20% of the market by 2024. America, as Young points out, makes 12% of the global semiconductor supply.
That’s why the CHIPS Act is vital to the future of our economy and defense. It’s also inspiring for those of us who crave innovation. The race is on.
